Official says Israel to withhold Palestinian tax money, worth millions of dollars of funding

Published January 08, 2015

An Israeli official says the government has decided to stop transferring tax money to the Palestinians, putting at risk hundreds of millions of needed dollars.

Thursday's move marks the toughest sanction yet that Israel has imposed since U.S.-brokered peace talks have faltered.

The Palestinians owe Israeli companies hundreds of millions of dollars for electricity, power and other services. The Israeli official, speaking on condition of anonymity as he wasn't authorized to speak publicly, said Israel would deduct the Palestinian debt against its monthly transfer of tax money is collects for the Palestinians.

That money is some $100 million a month. It wasn't clear how much money would be withheld.

Under interim peace accords, Israel collects taxes on behalf of the Palestinians. Without it, the Palestinian Authority can't pay its workers.

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