February 21, 2019•Update: February 22, 2019
By Mohamed Khabisa
RAMALLAH, Palestine
The Palestinian government will adopt a raft of austerity measures to offset recent losses in tax revenue, Finance Minister Shukri Bishara said Thursday.
Bishara made the remarks at a joint press conference in Ramallah held with Foreign Minister Riyad al-Maliki to discuss Israel’s recent decision to withhold taxes collected on behalf of the Palestinian Authority (PA).
At the press conference, Bishara promised that the government would not raise taxes to offset the revenue losses.
“We won’t raise taxes,” he said. “In fact, we might even lower them on certain domestically-manufactured goods."
Bishara conceded, however, that Ramallah was "entering a new a phase of confrontation with the enemy [i.e., Israel] and will likely face difficulties in the weeks ahead”.
“We plan to take loans from 14 local banks, but it will be cautious borrowing,” the finance minister added.
One Palestinian banking source told Anadolu Agency that the government had already submitted a formal request for a $400-million loan from the local banking sector.
Regarding unpaid public-sector salaries, Bishara said: “We will pay these -- at least partially -- in coming months, but everyone will have to make sacrifices.”
On Sunday, Israel announced plans to deduct 502 million Israeli shekels (roughly $138 million) from Palestinian taxes it collects on behalf of the Ramallah-based PA.
Israel says the PA pays this amount out every month in the form of stipends to the families of Palestinians jailed by Israel for allegedly carrying out attacks on Israelis.
Each month, Israel collects about $175 million in taxes levied on Palestinian imports and exports on behalf of the PA, for which tax revenue represents the main source of income.
