Fears of an economic crisis are mounting in Palestine. Import tax revenue collected by Israel constitutes more than 60 per cent of Ramallah’s income. AFP
Fears of an economic crisis are mounting in Palestine. Import tax revenue collected by Israel constitutes more than 60 per cent of Ramallah’s income. AFP
Fears of an economic crisis are mounting in Palestine. Import tax revenue collected by Israel constitutes more than 60 per cent of Ramallah’s income. AFP
Fears of an economic crisis are mounting in Palestine. Import tax revenue collected by Israel constitutes more than 60 per cent of Ramallah’s income. AFP

Palestinians fear economic collapse as Israel moves to withhold tax revenue


Thomas Helm
  • English
  • Arabic

Live updates: Follow the latest on Israel-Gaza

Israel's far-right Finance Minister Bezalel Smotrich has reopened a long-standing economic battle between his country and the Palestinian Authority, announcing this week that he would withhold tax revenue Israel collects on behalf of the PA.

The move comes in response to Norway, Spain and Ireland saying they will recognise a Palestinian state.

Mr Smotrich said he and other ministers were seeking "harsh punitive measures against the [PA] for its unilateral actions against Israel, including its pursuit of unilateral recognition".

But US Treasury Secretary Janet Yellen said on Thursday that the decision "threatens economic stability in the West Bank".

The Palestinian import tax revenue that Israel collects constitutes more than 60 per cent of Ramallah’s income. Withholding the funds is a potentially existential blow to the PA, which has faced severe economic pressure since the start of the Gaza war.

Israel holds the revenue as part of the 1994 Paris Protocol, signed by the Palestine Liberation Organisation and Israeli authorities.

Palestinian officials have long accused Israel of exploiting the arrangement, which give the country the power to exert significant pressure on the Palestinian economy. The protocol was also agreed on as part of a transitional set of measures that was supposed to end in 1999, in a framework put in place on the path towards the establishment of a Palestinian state.

US National Security Adviser Jake Sullivan sharply criticised Mr Smotrich’s move, saying he thinks it is “wrong on a strategic basis because withholding funds destabilises the West Bank [and] undermines the search for security and prosperity for the Palestinian people, which is in Israel’s interests”.

Many Israeli politicians, particularly on the far right, say Israel should not give the funds to the PA, which it accuses of supporting terrorism.

In January, Israel’s cabinet approved the transfer of frozen Palestinian tax funds, as part of a new arrangement for the money to be held by Norway in a trust fund.

In the run up to the deal, Israel demanded that none of the revenue be sent to Gaza, but only to the occupied West Bank, which a growing number of western nations and Israeli security officials said was on the brink of collapse. Such an eventuality is widely considered a significant risk to Israel, as well as Palestinians.

Since the outbreak of the Gaza war in October, the PA, a major employer in the West Bank, has struggled to pay employee salaries in full.

Israeli Finance Minister Bezalel Smotrich. Reuters
Israeli Finance Minister Bezalel Smotrich. Reuters

Leading Palestinian businessman Samir Hulileh told The National that Mr Smotrich’s announcement is an “amateur declaration by an ideological minister of finance who doesn’t recognise the [dangerous consequences for] Israel, the Palestinian Authority and the stability in our relationship".

Mr Hulileh described the decision to withhold the money as “blackmail” and said it was in “complete violation of an international agreement signed and sponsored by the Americans, the Russians and the UN”.

“This Israeli government doesn’t want political and economic stability in the West Bank, because that means [the PA] has legitimacy,” he said. “They prefer another Hamas in the West Bank so they can copy what they have done in Gaza through different means.”

The PA also now faces the threat of Israel ending a waiver on July 1 that allows Israeli banks to work with Palestinian banks.

The arrangement is crucial for paying PA salaries and makes it possible to import essential goods and utilities from Israel into the occupied West Bank.

Ms Yellen warned on Thursday that the move risks creating a "humanitarian crisis".

Mr Hulileh said the decision would also affect Israel. “Palestinians have to be prepared for the prospect [of the ending of the waiver] immediately, but Israeli exporters would also be paying a dramatic price, as well as the Israeli government itself which supplies water, energy and fuel to the Palestinian Authority to the cost of about $1 billion annually," he said.

“Palestinians import from Israel $5.5 billion in goods and export $1.3 billion. If you don’t have a banking system, you have to have a cash system, which most governments hate given the risk of money laundering and other reasons.

"Palestinians would have to redirect trade away from Israel and instead through Jordan using dollars or Jordanian dinars – forget about the Israeli shekel and the Israeli banking system.”

How they line up for Sunday's Australian Grand Prix

1 Lewis Hamilton, Mercedes

2 Kimi Raikkonen, Ferrari

3 Sebastian Vettel, Ferrari

4 Max Verstappen, Red Bull

5 Kevin Magnussen, Haas

6 Romain Grosjean, Haas

7 Nico Hulkenberg, Renault

*8 Daniel Ricciardo, Red Bull

9 Carlos Sainz, Renault

10 Valtteri Bottas, Mercedes

11 Fernando Alonso, McLaren

12 Stoffel Vandoorne, McLaren

13 Sergio Perez, Force India

14 Lance Stroll, Williams

15 Esteban Ocon, Force India

16 Brendon Hartley, Toro Rosso

17 Marcus Ericsson, Sauber

18 Charles Leclerc, Sauber

19 Sergey Sirotkin, Williams

20 Pierre Gasly, Toro Rosso

* Daniel Ricciardo qualified fifth but had a three-place grid penalty for speeding in red flag conditions during practice

Closing the loophole on sugary drinks

As The National reported last year, non-fizzy sugared drinks were not covered when the original tax was introduced in 2017. Sports drinks sold in supermarkets were found to contain, on average, 20 grams of sugar per 500ml bottle.

The non-fizzy drink AriZona Iced Tea contains 65 grams of sugar – about 16 teaspoons – per 680ml can. The average can costs about Dh6, which would rise to Dh9.

Drinks such as Starbucks Bottled Mocha Frappuccino contain 31g of sugar in 270ml, while Nescafe Mocha in a can contains 15.6g of sugar in a 240ml can.

Flavoured water, long-life fruit juice concentrates, pre-packaged sweetened coffee drinks fall under the ‘sweetened drink’ category
 

Not taxed:

Freshly squeezed fruit juices, ground coffee beans, tea leaves and pre-prepared flavoured milkshakes do not come under the ‘sweetened drink’ band.

UAE currency: the story behind the money in your pockets
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)

Dark Souls: Remastered
Developer: From Software (remaster by QLOC)
Publisher: Namco Bandai
Price: Dh199

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Muslim Council of Elders condemns terrorism on religious sites

The Muslim Council of Elders has strongly condemned the criminal attacks on religious sites in Britain.

It firmly rejected “acts of terrorism, which constitute a flagrant violation of the sanctity of houses of worship”.

“Attacking places of worship is a form of terrorism and extremism that threatens peace and stability within societies,” it said.

The council also warned against the rise of hate speech, racism, extremism and Islamophobia. It urged the international community to join efforts to promote tolerance and peaceful coexistence.

WOMAN AND CHILD

Director: Saeed Roustaee

Starring: Parinaz Izadyar, Payman Maadi

Rating: 4/5

Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

How to apply for a drone permit
  • Individuals must register on UAE Drone app or website using their UAE Pass
  • Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
  • Upload the training certificate from a centre accredited by the GCAA
  • Submit their request
What are the regulations?
  • Fly it within visual line of sight
  • Never over populated areas
  • Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
  • Users must avoid flying over restricted areas listed on the UAE Drone app
  • Only fly the drone during the day, and never at night
  • Should have a live feed of the drone flight
  • Drones must weigh 5 kg or less
If you go

The flights

There are direct flights from Dubai to Sofia with FlyDubai (www.flydubai.com) and Wizz Air (www.wizzair.com), from Dh1,164 and Dh822 return including taxes, respectively.

The trip

Plovdiv is 150km from Sofia, with an hourly bus service taking around 2 hours and costing $16 (Dh58). The Rhodopes can be reached from Sofia in between 2-4hours.

The trip was organised by Bulguides (www.bulguides.com), which organises guided trips throughout Bulgaria. Guiding, accommodation, food and transfers from Plovdiv to the mountains and back costs around 170 USD for a four-day, three-night trip.

 

How to wear a kandura

Dos

  • Wear the right fabric for the right season and occasion 
  • Always ask for the dress code if you don’t know
  • Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work 
  • Wear 100 per cent cotton under the kandura as most fabrics are polyester

Don’ts 

  • Wear hamdania for work, always wear a ghutra and agal 
  • Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Our legal columnist

Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

APPLE IPAD MINI (A17 PRO)

Display: 21cm Liquid Retina Display, 2266 x 1488, 326ppi, 500 nits

Chip: Apple A17 Pro, 6-core CPU, 5-core GPU, 16-core Neural Engine

Storage: 128/256/512GB

Main camera: 12MP wide, f/1.8, digital zoom up to 5x, Smart HDR 4

Front camera: 12MP ultra-wide, f/2.4, Smart HDR 4, full-HD @ 25/30/60fps

Biometrics: Touch ID, Face ID

Colours: Blue, purple, space grey, starlight

In the box: iPad mini, USB-C cable, 20W USB-C power adapter

Price: From Dh2,099

Other acts on the Jazz Garden bill

Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.

Our legal consultants

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

UAE v Gibraltar

What: International friendly

When: 7pm kick off

Where: Rugby Park, Dubai Sports City

Admission: Free

Online: The match will be broadcast live on Dubai Exiles’ Facebook page

UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)

Updated: May 24, 2024, 3:41 AM`