Jerusalem has withheld the transfer of tax revenues to the Palestinian Authority this month, Israeli Finance Minister Bezalel Smotrich said on Monday, citing Ramallah's support for terrorism.
In a statement cited by Arutz 7, the Finance Ministry said that of more than 740 million shekels ($200 million), some 590 million shekels were deducted to cover debts owed by the PA to the Israel Electric Corporation, as well as to "water and environmental corporations."
The ministry said deductions were also made for funds that Ramallah intended to transfer to terrorist elements.
The remaining balance has been frozen in line with a policy implemented by Smotrich over the past year, under which the Jewish state has stopped transfers to the Palestinian Authority over the PA's actions against Israel in international forums and its support for terror.
"We will not transfer funds that ultimately reach terrorists who harm Israeli civilians," said Smotrich. "Our policy is clear: every shekel intended to encourage terrorism or hostile activity will be offset and stopped. At the same time, we are acting responsibly to ensure that the funds are directed toward safeguarding the vital interests of the State of Israel."
He added: "Whoever chooses to fight the State of Israel in the international arena and to support terrorism will bear the price."
PA Prime Minister Mohammed Mustafa on Sunday accused Jerusalem of imposing an "economic occupation" on his organisation, which has a level of self-governance in parts of the West Bank.
Mustafa told reporters at a press conference in the city of al-Bireh that he was working with the international community to pressure Israel to release the funds.
"We are living without our income from customs and taxes collected by Israel on our behalf," the Palestinian politician confirmed.
Jerusalem collects 600 million-700 million shekels ($160 million-$190 million) in tax funds on behalf of the PA every month under the terms of the Oslo Accords, signed with the PLO in the 1990s.
The Protocol on Economic Relations, aka the Paris Protocol, was signed in April 1994 and incorporated with minor changes into the Oslo II Accord of September 1995.
In 2018, lawmakers from Israeli Prime Minister Benjamin Netanyahu’s ruling Likud Party initiated and promoted legislation to offset the sum to put pressure on the PA to stop rewarding terrorism.
Around one billion shekels ($270 million) in yearly tax revenue that Israel collects on behalf of the PA goes towards its “pay for slay” policy, under which it disburses monthly stipends to terrorists and their relatives.
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