Suspended tax transfers leave Palestinian economy on the brink

posted on: Mar 26, 2015

REUTERS – Israel’s decision to withhold $130 million a month in revenue collected on behalf of the Palestinians is strangling the economy and leaving the banking system dangerously exposed, the Palestinian central bank governor said on Wednesday.

Israel stopped the transfer of revenues from tax and customs duties in January in protest at the Palestinians’ move to join the International Criminal Court from April 1, when war crimes charges may be filed against Israel.

Since then, more than $500 million has been withheld from the economy, prompting the Palestinian Authority, which administers the West Bank, to cut most of its employees’ salaries by 40 percent and resort to an emergency budget.

Source: www.haaretz.com