Israel has decided to pay off the Palestinian Authority's (PA) large debt in the electricity sector with tax funds collected for Palestine. The PA's financial crisis has deepened in the context of the ongoing war in Gaza. Occupier Israel took this decision to protect its own interests by withholding tax funds.
This decision may trigger new discussions in the international arena. British news agency Reuters reported this news in a report.
Israeli Finance Minister Bezalel Smotrich said on Sunday that the state-owned Israel Electric Company (IEC) plans to pay off nearly 2 billion shekels ($544 million) in debt using tax money collected for the PA.
According to a longstanding settlement agreement between Israel and Palestine, Israel collects taxes on goods entering the West Bank and hands them over to the PA in Ramallah.
Israel has withheld 800 million shekels allocated for administrative expenses in Gaza since the October 7, 2023, Hamas-led invasion of Israel.
Smotrich said at Sunday's cabinet meeting that the money saved in Norway will be used to pay the 1.9 billion shekel debt of the IEC. He said the process was implemented after a series of anti-Israel actions, including Norway's unilateral recognition of the Palestinian state.
Smotrich also noted that the IEC suffered high interest and financial losses due to the PA's debt, which the burden fell on the citizens of Israel.
According to the Ministry of Finance of Palestine, they reached an agreement with the country for the transfer of a part of the 1.5 billion shekel funds that have been stuck in Norway since January last year. The fund was earmarked for financial aid to Gaza. However, such withholding of money is referred to as a punitive measure.
As part of the deal, 767 million shekels of the money saved in Norway will be paid to Israeli energy companies for weekly fuel purchases. The same amount will be used to pay electricity-related debts to IEC of PA power distribution companies.
Smotrich opposes sending money to the PA. He alleged that the PA had indirectly supported attacks on Israel led by Hamas.
Israel has withheld more such money. Israel is currently deducting 275 million shekels of tax revenue allocated to Gaza each month, deepening the PA's financial crisis, according to the Palestinian Finance Ministry.
The ministry said they are working with international partners to ensure the speedy release of these funds.