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ollowing Congressional passage of the Taylor Force Act, cutting US aid to the Palestinian Authority until the PA stops paying monthly stipends to terrorists, the Knesset Foreign Affairs and Defense Committee approved a similar measure on Monday whereby Israel will withhold payments of taxes it collects on behalf of the PA in a sum equal to whatever the PA expends on its “pay for slay” program. Maurice Hirsch, the former IDF head of military prosecution for Judea and Samaria — and current head of legal strategies for Palestinian Media Watch, an NGO that monitors Palestinian incitement — says he hopes both the US and Israeli laws will serve as a financial one-two punch that will pressure the Palestinians to reform their ways.

The proposed Knesset law would withhold taxes that Israel collects on behalf of the Palestinians. This economic relationship is not well understood. Can you explain what taxes Israel collects that are due the Palestinians?

The Oslo Accords created a unified tax envelope between Israel and the PA. The PA doesn’t have tax collection inspectors at any border, so Israel collects import taxes and VAT [a form of sales tax] on goods entering Gaza or the West Bank and then transfers them to the PA. Palestinians working in Israel also pay income tax. The Israeli government collects that and then transfers it to the PA.

The income taxes don’t remain with the Israel Tax Authority?

Incredibly not. You might be able to argue that it’s fair the import tax goes to the PA because they’re getting the goods, but normally, a foreign citizen working in Israel pays income taxes to Israel. The Oslo Accords said when Palestinians work in Israel, the Palestinians will get most of those income taxes. But in return, the PA were supposed to prevent terrorism and stop incitement, and certainly not to incentivize terrorism. The money Israel collects for them ends up going into the promotion of terrorism.

How much money are we talking about?

It’s about NIS 600 to 700 million in taxes a month. What the Knesset legislation proposes is if the PA pays around NIS 1.2 billion a year to terrorists, which amounts to NIS 100 million a month, that monthly amount will be deducted from the NIS 600 to 700 million in tax money that’s collected.

If I were running the PA, I would say that’s a small price to pay, so why change? That being the case, how effective can any of this legislation be?

Let’s put it this way. It’s another NIS 1.2 billion they’ll have to find from other sources. When combined with Taylor Force, that cuts another 1.2 billion, so the total cuts are NIS 2.4 billion out of an NIS 18 billion budget. It’s not a small amount of money. In previous years when Israel withheld monies, the PA was forced to cut all salaries, including salaries to terrorists.

How does Israel accurately track how much the PA spends on pay for slay?

The PA themselves publicize exactly what the pay scales are for terrorists in Israeli jails and for the released terrorists. In their annual budget, they publish their figures for paying salaries to terrorists in jail, those who have already been released, and the stipends paid to families of dead terrorists.

That’s very transparent of them.

They would like not to be so transparent, but to comply with the conditions set by donor countries, the PA has been publishing their annual budget online. Sometimes it’s more detailed, and sometimes it just gives the more basic allocations. A bulletin put out by Palestinian Media Watch describes what they paid terrorists this year knowing Taylor Force was about to go through, and knowing Israel tabled legislation that would attack that money.

So not only are they transparent but they have chutzpah, too.

A tremendous amount of chutzpah. That already came across in March in their [defiant] response to passage of Taylor Force. It’s unbelievable, but they do not care about rubbing it in America’s face.

And Europe’s face, too.

Unfortunately, Europe doesn’t really care, and I don’t say that lightly. Europeans constantly say their money isn’t going to pay for terrorism and completely ignore the argument that if Abbas has only NIS 1,000 to pay for either education or for terrorists, and you give him the NIS 1,000 to cover education, then he could put his other money toward terrorism. The Europeans seem unwilling to accept the basic understanding that money is fungible, and whatever money they give the PA frees up other money to pay for terrorists.

Given your long experience prosecuting terrorists and your knowledge of the PA, what are the chances these cutbacks will induce them to reform their behavior on an institutional level?

The idea of rewarding terrorists is entrenched in the Palestinian mindset. Mahmoud Abbas has been quoted saying he would rather resign than stop paying salaries to terrorists. They’re utilizing 7% of their budget to support 25,000 to 30,000 terrorists [less than 2% of their population —Ed.]. What about the starving people in Gaza? This money could fill the gap that’s been left by America cutting aid to UNRWA for schools and food, yet we have statement after statement from the PA saying, “We will never stop.” A few years ago, [in reaction to] a suggestion that the wording of [the pay-for-slay] law be changed and be called social welfare, their answer was this isn’t social welfare — “These people are our heroes, and they need to be paid a salary.” So the chances of them changing without putting significant financial pressure on them is very slim to nonexistent.

(Excerpted from Mishpacha, Issue 714)