Israel moves to deduct uncollectible Palestinian debts from PA’s tax revenue


Israel’s Justice Minister is exploring methods to seize Palestinians’ debts to Israelis that currently stands $140 million, which the Palestinian Authority has been unsuccessful in collecting from 20,716 individuals/businesses who own money.
• Leading suggestion: Have it deducted from the $100 million in taxes Israel collects on behalf of the PA each month.

By Shlomo Cesana


Justice Minister Ayelet Shaked is exploring the possibility of using the Palestinian Authority’s tax revenue, which Israel collects on the PA’s behalf, to pay off debts owed by Palestinian individuals to Israelis, her office said Thursday.

Israel’s Justice Minister, Ayelet Shaked

Under the 1993 Oslo Accords, a mechanism was set up by which Israel collects taxes — value added tax and customs fees — on behalf of the Palestinian Authority, to the tune of about $100 million a month.

Palestinians’ debts to Israelis currently stand at some 500 million shekels ($140 million), which the Palestinian Authority has been unable to collect from 20,716 individuals.

The situation involves 53,506 cases in which court orders or writs of execution have been issued by the Justice Ministry’s Enforcement and Collection Authority in cases where Israelis involved in transactions with Palestinian were not paid or provided the service for which they paid.

All cases involve transactions under NIS 75,000 ($21,000).

Shaked has reportedly asked her office to explore whether the Palestinian Authority could be held liable for the debts and whether Israel could deduct these sums from the PA’s monthly tax revenue.

Israel has withheld tax revenues it collects on the Palestinians behalf several times in the past, over Ramallah’s debts to the Israel Electric Corporation or as a punitive measure over the stipends the PA pays terrorists’ families.

A Justice Ministry official explained that Israelis can pursue legal measures against Palestinian debtors via Palestinian attorneys and the Palestinian Authority’s debt collection mechanism, but chances of such cases succeeding are slim.

Israelis may also seek legal remedies such as imposing a lien on assets a Palestinian debtor may have in Israel, but if that is not the case, Israelis find it exceedingly difficult to pursue debt collection procedures and are at risk of forfeiting their money, as Article 126 of the Enforcement and Collection Authority’s regulations states that a collection case may be closed if no action has been taken in it for two years.


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