Israeli Prime Minister Benjamin Netanyahu ordered an advance payment of tax money to the Palestinian Authority, currently undergoing financial difficulties, the premier’s office said on Tuesday.
The premier “ordered to transfer to the Palestinian Authority an advance of 250 million shekels ($63 million/49 million euros) of the tax money Israel collects, following the financial crisis the PA is facing”, a statement read.
Netanyahu’s decision comes after Palestinian prime minister Salam Fayyad moved to cut to fuel prices and VAT following more than a week of protests across the West Bank over the spiralling cost of living.
Earlier on Tuesday, Netanyahu said his government was “working on several fronts to help the Palestinian Authority with its economic problems”.
“We have made several changes to the tax agreements and we are working on the transfer of certain amounts of money to the Authority,” he said.
“I hope they will succeed in getting through this, which is in the mutual interest of both sides,” he added.
The Palestinian Authority is facing its worst economic crisis in years, largely because of a failure by donors to deliver pledged funds.
The crisis has left the Ramallah administration unable to fully pay tens of thousands of government workers.
Every month, Israel transfers tens of millions of dollars in customs duties which are levied on goods destined for Palestinian markets that transit through Israeli ports, and which constitute a large percentage of the Palestinian budget.
The transfers are governed by the 1994 Paris Protocols with the Palestinians.