Israel's Seizure of Palestinian Taxes Sparks Economic Devastation, Mounting Resistance

As Israel continues to withhold $130 million a month in revenue from the Palestinian Authority, officials warn that the West Bank’s already choked economy is teetering over the edge, with most public employees facing salary cuts of 40 percent or more and the government close to default.

“We have informed the Palestinian Authority that we have reached the limits permitted to them, or are about to get there, and that banks will not be able to continue to fund it,” Palestinian central bank Governor Jihad al-Wazir told Reuters on Wednesday.

“The situation in general is very tough,” al-Wazir continued. “Suspending the tax transfers is leading to a rapid economic deterioration.”

Ordinary people are bearing the brunt of these policies. Reuters reports:

Israel froze the tax revenue in early January in retaliation for the PA’s formal application to join the International Criminal Court. Since then, it has withheld over $500 million. These funds account for approximately two thirds of the PA’s budget and are used to pay tens of thousands of public employees, according to Haaretz.