Palestinian finance minister warns of 'existential threat' as Israel withholds tax revenues

Palestinian Finance Minister Estephan Salameh warned on Saturday that 2026 will be the most financially difficult year in more than three decades, accusing Israel of seeking to “destroy” the Palestinian Authority (PA) by imposing a "financial siege".

Speaking to the official Voice of Palestine radio, Salameh said the Israeli government had taken a decision to undermine the PA by withholding key revenues.

"The Israeli government has taken its decision to destroy the Authority through a financial siege," he said, adding: "This year will, in my estimation, be the most financially difficult since the establishment of the Palestinian National Authority."

The PA was established in 1994 under the Oslo Accords signed between the Palestine Liberation Organization and Israel in 1993.

Salameh described the Israeli economic pressure as an "existential threat" aimed at weakening the Palestinian national project and preventing the realisation of a Palestinian state.

He said Israel has not transferred Palestinian clearance tax revenues for 10 months “with the aim of exhausting the PA's ability to provide basic services to citizens”.

According to the minister, the Palestinian government’s public debt has exceeded $15.4 billion, a figure he described as "very large compared to the size of the local economy".

Arabi21 reported that the government has been forced to resort to borrowing from banks as an emergency measure to manage the shortfall.

The PA has faced recurring financial crises since 2019 due to Israeli deductions from clearance revenues. The crisis intensified in 2025, which Palestinian officials described as the most difficult year, with accumulated deficits and unpaid dues reaching $4.26 billion, according to Palestinian data.

Clearance revenues are taxes collected by Israel on goods imported into Palestinian areas on behalf of the PA. However, Israel has frequently withheld or deducted portions of these funds, using them as leverage in political disputes.

Following the start of Israel’s war on Gaza on 7 October 2023, Tel Aviv began transferring only about 30 percent of clearance revenues, after deducting funds allocated by the Palestinian government to salaries and social services in Gaza.

Israeli ministers have also escalated rhetoric against the PA. Far-right National Security Minister Itamar Ben Gvir has described it as "terrorist" and called for its removal.

The financial strain comes as violence in the occupied West Bank has intensified.

Since the start of the Gaza war, at least 1,112 Palestinians have been killed in the West Bank, around 11,500 injured and approximately 22,000 arrested, according to official figures.

Palestinian officials warn that without the restoration of clearance revenues, the PA's ability to function and provide basic services could deteriorate further in the coming year.