The Palestinian Authority (PA) decided Tuesday to reject all tax funds it receives from Israel since part of it will now be kept back due to the PA’s financial support for terrorism.

As reported by Israel’s Channel 13 News, PA President Mahmoud Abbas announced that, “Israel claims that the Palestinian Authority transfers funds to terrorists and therefore wants to offset these funds. So I say we do not want to receive these funds and every penny we have – we will transfer to the families of the martyrs.”

The Israeli Cabinet had resolved on Sunday to implement the law countering Ramallah’s “pay for slay” policy that was passed last July. The law says the government must withhold from Ramallah the amount of money its official agencies give to imprisoned and released terrorists, and to families of those killed while committing terrorist attacks.

According to the Defense Ministry, the amount in question for 2018 amounted to $140,350,300. That is the sum that will now be deducted in increments from the taxes and levies that the government collects on behalf of the PA and sends to them in monthly installments.

Ever since serious discussion began weeks ago on this issue, Palestinian officials have been using incendiary language and making threats regarding their response.

Earlier this month, the PA’s head of civil affairs, Hussein al-Sheikh, sent a letter warning that refusing all the transfer money was possible. Moreover, he said the PA would consider suing Israel in international court.

Rami Hamdallah, who resigned as PA prime minister last month, described the Israeli move as the “theft of Palestinian public money,” while describing the Israeli law as “racist.”

The amount to be withheld is between three to four percent of the PA’s annual tax income, but if the Authority is serious about refusing all such transfers from Israel, it could have a huge effect on its economy, since the taxes that Israel collects amount to over a quarter of its annual budget.

David Bedein, director of the Center for Near East Policy Research, says Abbas doesn’t need to worry about the effect on the PA’s economy because Saudi Arabia will supply the missing funds. “Saudi Arabia has increased their aid to UNRWA by 23,000 percent from $6 million dollars to $148 million in eight years,” he said.

Although the PA says it will not accept taxes “the strengthening of the PLO economy has been a priority of the Israeli government for years and it’s going to continue.”

Bedein recommends that Israel take three steps to stop the funding of terror by the PA. First is to close the bank accounts of terrorists. “The PA will send an automatic bank transfer to anyone who kills a Jew. The first thing you do, before you destroy their house, is put a lien on their account,” he said.

Second, “if anyone in the Palestinian Authority is caught writing a check for a killer, arrest them. The third thing is if the leadership continues to encourage murder, arrest them for war crimes.”

“Israel should be asking the nations of the world to halt all funds to the Palestinian Authority as long as they encourage the murder of Jews,” Bedein said.

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