Israel withholds Palestinian clearance funds, deducts $200 million amid financial crisis

Israel withholds Palestinian clearance funds, deducts $200 million amid financial crisis
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According to Anadolu Agency, Israel has once again withheld tax revenues (known as clearance funds) collected on behalf of the Palestinian Authority, deducting approximately $200 million in April 2026. The move is expected to deepen the ongoing financial crisis facing the Palestinian Authority.

A statement from Israeli Finance Minister Bezalel Smotrich’s office said that out of roughly $248 million collected, about $197.7 million was deducted to cover what Israel describes as outstanding debts owed by the Palestinian Authority to Israeli service providers, including electricity and water utilities.

The remaining funds were frozen and not transferred, in line with a policy implemented since 2025 in response to Palestinian diplomatic actions in international institutions.

Clearance funds are a key revenue source for the Palestinian Authority, consisting of taxes on imports that Israel collects and transfers. However, repeated deductions since 2019 have placed severe strain on the Authority’s finances, limiting its ability to pay public sector salaries and increasing debts to banks and private sectors.

Palestinian officials say the measures amount to economic pressure, with Prime Minister Mohammad Mustafa warning that such policies are contributing to broader economic restrictions in the West Bank.