Suspended tax transfers leave Palestinian economy on the brink
‘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.
The government is also in danger of not being able to service its outstanding loans, according to the governor of the Palestinian Monetary Authority, the central bank. “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,” Governor Jihad al-Wazir told Reuters.
Source: Palestine News Network 27th March 2015