Palestinian Authority unable to pay salaries before Eid as Israel withholds funds

The Palestinian Authority (PA) has announced that it will not be able to pay its employees’ salaries for February before Eid Al-Fitr, which falls at the beginning of next week, as Israel continues to withhold Palestinian tax revenues.

In a statement issued yesterday, the Palestinian Ministry of Finance said: “Due to the Israeli occupation government’s deliberate refusal to transfer the clearance funds [Palestinian tax revenues] for February 2025 until this moment, the Ministry of Finance announces that the February 2025 salaries will not be disbursed before Eid Al-Fitr.”

“Intensive efforts are ongoing to secure the required liquidity, and salaries will be paid immediately once the clearance funds are transferred,” it added.

It explained that “the occupation has withheld seven billion shekels ($1.89 billion) of Palestinian tax revenues from 2019 until February 2025.”

READ: 4,500 amputations, including 800 children, 540 women, in Gaza Strip

The clearance funds refer to taxes and customs duties imposed on goods imported into Palestinian territories, whether from Israel or via Israeli-controlled border crossings via land, sea and air.

Since the signing of the Oslo Accords between the Palestine Liberation Organisation (PLO) and Israel in the 1990s, the Israeli Ministry of Finance has collected these funds and transferred them to the Palestinian side monthly, deducting three per cent as administrative fees.

The Palestinian government primarily relies on clearance funds to pay public sector salaries, as they constitute 65 per cent of the Palestinian Authority’s total financial revenues.

However, since 2019, Israel has deducted 600 million shekels ($165 million) annually from these funds, citing the Palestinian Authority’s monthly allocations to prisoners and former detainees.

READ: Israel passes law to deduct Palestinian prisoners’ defence fees from funds due to the PA