Why does Israel want to send Palestinian taxes to Norway?  

Is Israel sending Palestine’s taxes to Norway? The Benjamin Netanyahu cabinet has given the go-ahead to a plan that sends the funds to Norway rather than the Palestinian Authority (PA). But why does Israel have the money in the first place? And is it going to transfer the money to Oslo? Let’s take a closer look: Why does Israel have the money? First, it is important to note that Israel’s finance ministry collects taxes on behalf of the Palestinians.

It then sends the money to the PA – which is backed by the West – every month.

The PA exercises limited self-rule in the Israeli-occupied West Bank under interim peace agreements reached in the 1990s. Though it does not administer Gaza where Islamist rival Hamas seized control in a brief civil war in 2007, the PA still has thousands of Gaza civil servants on its payroll. But there have been constant wrangles over the arrangement, including Israel’s demand that the funds do not reach Hamas, which it and most of the West deem a terrorist group. Hamas seized control of Gaza from the Western-backed PA in 2007 after a brief civil war, and two years after Israel withdrew settlers and military forces. Despite the Hamas takeover, many PA public sector employees in Gaza kept their jobs and continued to be paid with transferred tax revenues. Israel is now at war in Gaza to wipe out Hamas after a cross-border terror attack by militants of the Palestinian Islamist movement on 7 October. Why does Israel want to send money to Norway? Because Israel and the PA are at odds. As per The Times of Israel, the PA wants its money in full. The Israeli government, meanwhile, wants to deduct the sum the PA has allocated for its employees in Gaza. The PA is estimated to spend some 30 per cent of its budget in Gaza, where it also pays for medicine and social assistance programmes.

As per The National, the PA says the West Bank could devolve into chaos without it being able to pay its salaries.

The Palestine Liberation Organization said Sunday it wanted the money in full and would not accept conditions that prevent it from paying its staff, including in Gaza. “Any deductions from our financial rights or any conditions imposed by Israel that prevent the PA from paying our people in the Gaza Strip are rejected by us,” Hussein Al-Sheikh, secretary-general of the executive committee of the PLO, said on social media platform X, formerly Twitter. “We call on the international community to stop this behaviour based on piracy and stealing the money of the Palestinian people and force Israel to transfer all of our money,” he added as per Al Jazeera. Sheikh added that Palestinian leaders were “examining all proposals to solve the current financial crisis as a result of Israel’s withholding of our funds”. “The Palestinian leadership insists on its position of commitment to our people in the Gaza Strip,” he said. “The leadership appreciates the efforts made by brotherly and friendly countries to end the financial crisis. At the same time, the leadership demands an end to this destructive war and this continuing aggression against our people throughout the country.” [caption id=“attachment_13570622” align=“alignnone” width=“640”] Prime Minister Benjamin Netanyahu said the cabinet decision on the tax funds was supported by Norway and the United States. AP[/caption] The decision also comes as Israel faces heavy pressure from the US to disburse the funds. This way, Israel no longer holds Gaza’s funds. Instead, the money will be transferred monthly to Norway until Hamas is no longer in charge of Gaza. The framework is the brainchild of White House Middle East czar Brett McGurk and US Ambassador to Israel Jack Lew. The money will be placed in a trust account and Norway will be unable to transfer the money without the say-so of finance minister Bezalel Smotrich.

If Norway in any way violates the terms of the agreement, Israel will stop the transfers immediately.

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All the money in the trust will be sent back to Israel and Jerusalem will halt transferring money to the PA, as per the newspaper. Norway in November had called for the full tax transfer to be sent to the PA. It said payment was “critical” for the welfare of the Palestinian population. Norway is the chair of the international donor group to the Palestinian territories, known as the Ad Hoc Liaison Committee. It was a facilitator in the 1992-93 talks between Israel and the Palestine Liberation Organization that led to the Oslo Accords providing for limited Palestinian self-rule. Prime Minister Benjamin Netanyahu said the cabinet decision on the tax funds was supported by Norway and the United States. Washington will be a guarantor that the framework holds. ‘Not one shekel will go to Gaza’ “The United States and Norway respect the decision of the political and security cabinet that ordered a halt to the transfer of Gaza funds to the Palestinian Authority. Therefore, the frozen funds will not be transferred to the Palestinian Authority, but will remain in the hands of a third country,” the Prime Minister’s Office said in a statement as per Times of Israel. Netanyahu’s offices said the money, or any equivalent, will not be transferred “in any situation, except with the approval of the Israeli finance minister, and also not through a third party.” A spokesperson for Smotrich, who heads a far-right, pro-settlement party, confirmed that Norway would hold the funds under the arrangement. “Not one shekel will go to Gaza,” vowed Smotrich, who has long been opposed to transferring funds to the PA.

Israel’s national security minister Itamar Ben-Gvir has opposed the plan.

“Last week they started moving flour trucks and now they are making a decision that does not guarantee that the money will not reach the Nazis from Gaza,” Ben-Gvir wrote on X. He complained that prime minister Netanyahu was “constantly” moving “the red line”. Al Jazeera quoted Nour Odeh, a Ramallah-based political analyst in the West Bank, as saying, “It’s a way for Israel to assert how much control it has on everything, including the PA’s ability to function. It’s not clear if the PA would be willing to accept conditions, because it would be humiliating to walk back its pledge to not take the revenues with the deduction of Gaza’s share of it.” “[WIthholding the revenues] will have a huge impact because those employed by the PA won’t receive their salaries at a time when many are starving due to Israel’s siege and war – people need that money to survive.” But there could be a twist in the tale. The Times of Israel on Tuesday reported that both Norway and PA have not given final approval to the move. Norway’s foreign ministry has said it is reviewing the framework, while a PA official told the newspaper Ramallah is doing the same. Meanwhile, Sky News Arabia quoted a Palestinian source as saying the PA had agreed to a partial transfer of the funds minus the sum it has allocated to Gaza. Whatever happens next, the situation bears watching. With inputs from agencies