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Accept tax revenues collected by Israel or lose aid, EU tells Palestinians

Palestinian Authority began boycotting Israeli tax payments in May following Israel's plans to annex large swaths of the occupied West Bank
Palestinians gather to commemorate the Second Intifada and protest Israeli normalisation deals with the UAE and Bahrain in Ramallah on 28 September (AFP/File photo)

The European Union has given the Palestinain Authority an unprecedented ultimatum: accept tax revenues collected by Israel on its behalf or lose EU aid. 

The PA has since May refused to accept the taxes collected on its behalf in protest against Israel's planned annexation of parts of the occupied West Bank. It has also severed security and civilian coordination with Israel, which were laid out under the Oslo Accords. 

Palestinian Authority rejects $190m Israeli tax payment in annexation plans protest
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Since the planned annexation was suspended last month, a partial stipulation of the UAE's normalisation deal with Israel, the EU has decided it is time for the PA to come back to the table and accept the tax revenue and coordination efforts, Axios reported on Wednesday. 

According to Axios, EU foreign policy chief Josep Borrell called PA President Mahmoud Abbas and told him that the European Union would not offer financial assistance or loans until the PA accepts the taxes. Jordan and Egypt have made similar demands, according to the news site. 

Choosing to refuse the tax revenues, around $190m, was a big move, as the money is the primary source of income for the PA, accounting for more than half of its budget.

Abbas's reaction to the EU demand was not immediately clear. 

Postponed, not cancelled

While Israel did suspend its plans to annex large swaths of the occupied West Bank, Benjamin Netanyahu's government has since said that it is a temporary policy decision and it still fully plans to go forward with annexation. 

"We said in our statement that sovereignty will be postponed, and this does not mean that it has been abolished, but rather that it has stopped. It has been suspended for a year, maybe more, but it has not been cancelled," David Friedman, the US ambassador to Israel, said last month. 

Israel's West Bank annexation postponed for a year, not cancelled, says Friedman
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Meanwhile, the PA has been furious with the UAE and Bahrain for accepting the US-led normalisation deal with Israel. 

Addressing the UN General Assembly last month, Abbas called on Secretary General Antonio Guterres to sidestep the US's efforts by arranging an international conference on the peace process, which should take place "early next year" between "all relevant parties". 

"It should aim to end the occupation and grant the Palestinian people their freedom and independence in their own state along the 1967 borders with East Jerusalem as its capital and settle final-status issues, notably the refugee question," Abbas said at the time.

Last year, the Ramallah-based government boycotted the Israeli tax payments for several months after Israel deducted $10m from the total payments, which it said was equal to the amount the PA pays the families of Palestinian political prisoners or those killed by Israel, a programme that the authority said it was not willing to halt.