Israel Cancels Tax Revenue Agreement with Norway
According to the Yediot Ahronot newspaper, the Israeli government has decided to cancel an agreement to deposit tax revenues collected on behalf of the Palestinian Authority into its Norwegian account. The decision was made by Israel’s reduced security cabinet, but the details that were made public remained secret.
It is stated that Israel’s move was made in response to an important development such as Norway’s recognition of the state of Palestine last May. According to the news, Israel is planning to make a new agreement with a country other than Norway for the transfer of tax revenues collected on behalf of the Palestinian Authority and is trying to convince Switzerland in this direction.
Norway was described in the report as “the most hostile country in Europe to Israel” and the Israeli Foreign Ministry was reportedly working on developing additional punitive measures against Norway, although specific details of these measures were not shared.
Tax Funding Cuts and the Palestinian Authority’s Response
On November 3, 2023, the Israeli Council of Ministers decided to cut the amount allocated to the Gaza Strip and Palestinian prisoners from the tax fund collected on behalf of the Palestinian government. Following this decision, on November 5, 2023, the Palestinian administration announced that it refused to receive the tax fund.
The Norwegian Ministry of Foreign Affairs announced on February 19 that it has taken over the process of tax revenues collected by Israel. The statement emphasized that Israel should transfer the taxes it collects to Norway and then Norway should send the amount other than the amount allocated for Gaza to the Palestinian Authority.
The Paris Economic Protocol and the Recognition of the State of Palestine
Within the framework of the Paris Economic Protocol signed between Israel and the Palestine Liberation Organization (PLO) in 1994, the Israeli administration collects approximately $2 billion in annual tax revenues on behalf of the Palestinians from the border gates under its control and transfers this to the Palestinian treasury.
Norway announced that it officially recognized the state of Palestine on May 28, 2023. Following this development, Israel decided to recall its ambassadors from Ireland and Norway, which recognize the state of Palestine. Norway’s decision to recognize the state of Palestine simultaneously with Ireland and Spain increased the number of countries that recognize Palestine to 146.
