Earlier this month the Israeli government announced that, for the second month, it would withhold the transfer of the tax revenue it collects on behalf of the Palestinian Authority. The action, which brings the total withheld to over $200 million, is in retaliation for President Mahmoud Abbas signing requests to join 20 international institutions at the end of last year, the most important of which is the International Criminal Court. Israel is once again responding to legal Palestinian requests with further illegal collective punishments. The tax revenues are not Israeli charity but Palestinian money which is rightfully theirs. The tax revenue of $130 million per month is almost two-thirds of the Palestinian budget. The withholding of taxes will more than double the current Palestinian budget deficit, which stands at about $100 million per month. Hundreds of thousands of students could be without teachers, hospitals could cease to function, policemen could go on strike. The cost to both Palestinians and Israelis could be immense in both financial and human terms. Preventing the Palestinian Authority from conducting essential government business, including functions related to health services and law and order, is in no one's interest. Israel's action is a violation of its obligations under the Paris Protocol of the Oslo Accords and there are calls for an immediate reversal of this decision. There is a paradox here: the West Bank imports about 72 percent of its goods from Israel – in other words, the Palestinians buy some $2.75 billion worth of goods and services from Israel and export some $750 million to Israel. Israeli goods and service-providers enjoy almost three times as much business from the Palestinian market than the Palestinians enjoy from the Israeli market. This means that the PA has in its power the ability to put pressure on Israeli businesses, and could even implement sanctions against them in response to the sanctions Israel has imposed on the PA. Beyond the commercial considerations, it is unclear what Israel hopes to achieve by implementing illegal decisions. Withholding tax revenue has already been tried in the past – once in 2012 when the PA turned to the UN General Assembly and won recognition as a non-member state; and in 2011, as punishment for the announcement of Fatah's reconciliation with Hamas. In both cases, the sanctions did not lead to any change in Palestinian policies. Any sanctions imposed by Israel on the PA could very well serve as a double-edged sword. If the PA ceased security cooperation with Israel or even decided to disband its security agency, as it has said it might do as early as the first week of March in the event that it does not receive its tax revenue, Israel could be faced with a security void that would put the lives of Israelis at daily risk. With the tax revenue, the Palestinians sustain themselves and keep the Palestinian Authority functioning. It is clearly in Israel's interest to have a functioning PA. Furthermore, it would be a mistake to expect the Palestinian Authority to relinquish its various international drives, especially after adopting a strategy of mounting a diplomatic effort instead of an armed struggle.
