Israel agrees to transfer Palestinian tax money to third-party country

The Israeli cabinet approved a plan on Sunday to send Palestinian tax money to Norway to be transferred to the Palestinian Authority pending approval from Tel Aviv.

The money, of which the share of the Gaza Strip was withheld, would only be transferred to the Ramallah-based authority with the express permission of Israel.

"The United States and Norway respect the decision of the political and security cabinet that ordered a halt to the transfer of Gaza funds to the Palestinian Authority. Therefore, the frozen funds will not be transferred to the Palestinian Authority, but will remain in the hands of a third country," Prime Minister Benjamin Netanyahu's office said in a statement.

"The money or its consideration will not be transferred under any circumstances, except with the approval of Israel's finance minister, not even through a third party. Any violation of the agreement allows the finance minister to immediately freeze" all of the Palestinian tax funds, it added.

According to the statement, the United States will serve as a guarantor of the plan's implementation.

On Friday, Israel's far-right Finance Minister Bezalel Smotrich turned down a US request to transfer tax money collected by Tel Aviv to the Palestinian Authority.

The tax revenues-known in Palestine and Israel as maqasa-are collected by the Israeli government on behalf of the Palestinian Authority on Palestinian imports and exports and Israel in return earns a commission of 3%.

The revenues are estimated to total around $188 million every month and represent the main source of income for the Palestinian Authority.

The Palestinian government uses these funds to pay the salaries of public employees and retirees, who number 140,000 and 53,000, respectively.

In November, Smotrich conditionally approved the transfer of the tax money to Palestinians after deducting the amount allocated to Gaza amounting to 275 million shekels ($73.31 million) per month.

On Jan. 4, the US warned that the failure to transfer tax funds to the Palestinian Authority would lead to its collapse.