Palestinian Prime Minister Mohammad Mustafa stated that Israel has refrained from transferring tax revenues to the Palestinian Authority for the fourth consecutive month, noting that the total withheld funds have exceeded 10 billion shekels (3 billion dollars).

This was announced during Mustafa’s chairing of an urgent meeting of the Permanent Economic Ministerial Committee in his office in Ramallah, central West Bank, on Sunday, to follow up on the ongoing economic and financial challenges, according to a statement from the Palestinian Prime Minister’s office.

During the meeting, Mustafa pointed out the “continued withholding by Israel of more than 10 billion shekels of clearance revenues, and the complete halt of any transfers for the fourth consecutive month.”

He explained that this constitutes “one of the most significant challenges facing our economy and financial situation.”

He referred to the economic contraction and decline in growth due to the war on Gaza, Israeli measures in the West Bank over recent years, as well as the cash crisis caused by Israel’s refusal to accept billions of shekels accumulated in Palestinian banks, resulting in deep impacts threatening the entire economic movement and financial sector, according to the statement.

The Palestinian Prime Minister said, “Unemployment has reached unprecedented levels, about 80% in Gaza and more than 30% in the West Bank, which poses a challenge to our national economy.”

He also addressed the burden of public debt accumulated over years in Palestine, “where the government is committed to paying large amounts to service this debt that exceeds the monthly local income.”

“Clearance” funds are taxes imposed on goods imported into the Palestinian side, whether from Israel or through border crossings controlled by Tel Aviv, which Israel collects on behalf of the Palestinian Authority.

However, since 2019, Israel has decided to deduct amounts from these funds under various pretexts, plunging the Authority into a financial crisis that made it unable to pay full salaries to its employees.

The last time the Palestinian government paid its employees’ salaries was on July 29 for the month of May, at a rate of 60%, after a three-month halt.

The Prime Minister said the government, in cooperation with national institutions, “has begun taking many steps to face the current challenges, aiming to create lasting economic and financial stability and change.”

He mentioned that these steps include “launching a national development and reform program, which includes 10 initiatives currently being implemented that will contribute to changing the economic structure and alleviating the financial crisis, a financial reform program including measures to increase local income, stop financial leakage, improve public services, and move towards digital transformation alongside austerity and rationalization of expenditures.”

Mustafa pointed to ongoing efforts to increase international support, confirming “significant progress in this regard compared to recent years” through several programs including the European support program and another provided by the World Bank.

He spoke about “an emergency financial support program developed in cooperation with Arab brothers and international partners, to be presented at the donors’ conference to be held on the sidelines of the United Nations General Assembly meeting in the coming weeks (in New York), to provide emergency financial support for six months to the budget, alongside international guarantees to support the government bond program for restructuring and governing public debt, not increasing it.”

The Prime Minister noted ongoing efforts to recover the funds withheld by Israel and resolve the shekel accumulation crisis in cooperation with the Monetary Authority by all possible means.

On Tuesday, the Palestinian government warned in its weekly session about the repercussions of worsening its financial crisis on the health, education, and security sectors, especially amid the continued withholding of clearance funds.

Due to the financial crisis, the Ministry of Education announced on Saturday the postponement of the start of the school year in West Bank schools, originally scheduled for Monday, to begin on September 8.

According to a report published by the World Bank in February 2024, clearance revenues constitute about two-thirds of the total financial income of the Palestinian Authority.

The monthly payroll bill for the Authority is estimated at about one billion shekels (around 298 million dollars), paid to about 245,000 beneficiaries, including 144,000 civil and military employees currently working, in addition to retirees and social benefit recipients.

Repeatedly, Israeli ministers, led by Prime Minister Benjamin Netanyahu, have incited against the Palestinian Authority and called for its overthrow.

This comes amid escalating attacks by the Israeli army and settlers in the West Bank concurrent with the genocidal war in Gaza, including East Jerusalem, resulting in the deaths of at least 1,016 Palestinians, injuries to about 7,000 others, and the arrest of more than 18,500, according to Palestinian data.

With US support, Israel has been committing genocide in Gaza since October 7, 2023, including killing, starving, destruction, and forced displacement, ignoring all international calls and International Court of Justice orders to stop.

The Israeli genocide has resulted in the deaths of 63,459 Palestinians, alongside 160,256 injured, most of them children and women, more than 9,000 missing, hundreds of thousands displaced, and a famine that killed 339 Palestinians including 124 children, as of Sunday.