Norway to transfer frozen tax funds from Israel to Palestine

(Patria) - Norway has agreed to help facilitate the transfer of frozen tax funds intended for the Palestinian Authority that were collected by Israel, the Norwegian government announced on Sunday.

Under interim peace agreements reached in the 1990s, the Israeli Ministry of Finance collects taxes on behalf of the Palestinians and makes monthly transfers to the Palestinian Authority, but a dispute over payments erupted after the Hamas attack on October 7, Reuters reported.

The temporary solution will allow payments to resume and prevent a financial collapse of the Palestinian Authority, enabling it to pay salaries and provide basic services such as schools and healthcare, Norway said. Access to revenue is crucial for the survival of the Palestinian Authority, which has limited self-rule in the Israeli-occupied West Bank.

"This is crucial for promoting stability in the region and for the Palestinian Authority to have legitimacy among its people," said Norwegian Prime Minister Jonas Gahr Støre.

Under the solution agreed with Israeli and Palestinian officials, Norway will serve as an intermediary to hold the revenue that Israel has withheld since October 7.

"The Palestinian Authority will be ready to accept other funds," Norway said.

Norway will retain a portion of the revenue equal to the amount Israel allocates for Gaza, a spokesperson for the Norwegian Ministry of Foreign Affairs said. On November 2, Israel said it would continue transferring the Palestinian Authority's tax revenues from the West Bank but would withhold funds related to Gaza, which is governed by Hamas, although the Palestinian Authority helps cover public sector salaries there, as well as health and social welfare programs.

On November 6, the Palestinian Authority said it wanted all the money and would not accept conditions preventing it from paying its staff. It is estimated that it will spend about 30 percent of its budget in Gaza. Israeli officials said on January 21 that the Israeli government had approved a plan for frozen tax funds intended for the Gaza Strip, which will be held by Norway instead of being transferred to the Palestinian Authority.