US announces that Israel agrees to resume transferring tax revenue to Palestinian Authority

The State of Israel has agreed to resume transferring tax revenues to the Palestinian Authority, according to an announcement from United States Secretary of the Treasury Janet Yellen on Tuesday.

“The United States has urged the Israeli government to release clearance revenue to the Palestinian Authority to fund basic services and to bolster the economy in the West Bank,” Yellen said, adding that she had sent “a personal warning of the war’s economic toll” to Prime Minister Benjamin Netanyahu.

“I welcome news that an agreement has been reached and that funds have started to flow,” she said.

Yellen confirmed that she had asked Israeli Prime Ministery Benjamin Netanyahu to implement “a number of steps that the US believes must be taken,” including “reinstating work permits for Palestinians and reducing barriers to commerce within the West Bank.”

Following an executive order issued by U.S. President Joe Biden earlier this month, Yellen noted: “These actions are vital for the economic well-being of Palestinians and Israelis alike,” and added that the U.S. is continuing "to explore options for strengthening the West Bank economy.”

After the brutal massacre by Hamas terrorists on Oct. 7, Israel stopped the transfer of tax and customs funds to the Palestinian Authority (PA). At the time, Israeli Finance Minister Bezalel Smotrich said 'business as usual' was untenable.

“It is unthinkable that in this reality we will continue to transfer funds to Gaza as if nothing had happened,” Smotrich said while citing statements by PA officials in support of Hamas.

Among those statements was one made by former PA Prime Minister Mohammed Shtayyeh, who stressed the PA’s cooperation with Hamas.

“Hamas is a central part of the Palestinian political landscape, we are working to achieve unity under the guidance of President Abu Mazen,” Shtayyeh said, adding that “Israel is to blame for the situation.”

Israel collects taxes on behalf of the Palestinian Authority and typically transfers those funds to the PA monthly upon approval of the finance minister. However, after Oct. 7, Israel no longer continued to transfer portions of the funds that were earmarked for Gaza, reportedly about $75 million, or one-fourth of the total amount.

To protest Israel's withholding the funds, the PA has refused to accept any tax revenues and has not been able to pay its employees in full for several months since.

The PA also uses the funds to pay the families of terrorists and security prisoners, including those from Gaza, which reportedly amounts to about $148 million) annually.

In addition to withholding tax funds, Israel also suspended work permits for Palestinians in the West Bank and Gaza after Oct. 7.

Some Gazans with work permits were allegedly involved in the Oct. 7 massacres of Israeli southern border communities and had been spying on residents of the kibbutzim, supplying specific intelligence about the layout of the communities, the families, logistics, and even which pets that owned.

Prior to Oct. 7, approximately 17,000 Gazans and 150,000 West Bank Palestinians held work permits that allowed them to enter Israel for employment.