Imad Rajabi – Palestine Economy Portal

Translated by Tamara Barakat

According to the Ministry of Finance’s data, Israel has deducted 417 million shekels from the clearance revenues as net lending up until May 2016. The amount deducted decreased by 34% in comparison with the same period during 2015, when Israel deducted 632.3 million shekels.

In its budget for 2016, the Palestinian government anticipated that the deductions would reach 850 million shekels. The projected deductions for the previous year were 800 million shekels.

The net lending is the amount of money Israel deducts from the clearance revenues every month before transferring them to the Palestinian Government, in order to cover the electricity, water, and wastewater bills due on the Palestinian government. The deductions also cover medical transfer bills from the Palestinian Ministry of Health to Israeli hospitals.

Additionally, the net lending does not include the other 3% deducted by Israel from the clearance revenues in return for carrying the “service” of levying taxes on behalf of the Palestinian government, as stated in one of the provisions of the Paris Protocol on Economic Relations.

Experts told the Palestine Economy Portal that the net lending deductions deplete the Palestinian government’s resources. They stressed the importance of finding a solution to this problem and the delay of local authorities and electricity distribution companies in paying the electricity and water bills to the service providers.