Israel alleges the payments to those who have carried out attacks encourage further violence
Israel will withhold $180 million in tax revenue it collect last year on behalf of the Palestinian Authority (PA), or about 7% of the PA's total tax revenue, to offset stipends paid to Palestinians involved in attacks against Israelis, the Israeli cabinet said on Sunday.
The cabinet said it was implementing a law passed in 2018 allowing Israel to withhold funds equivalent to those the PA pays in stipends to Palestinians jailed in Israel, their families, and released prisoners.
The money comes from taxes Israel collects on behalf of the PA.
Israel transfers the tax funds to the PA on a regular basis as outlined by a 1994 economic agreement.
The move, approved by the security cabinet of recently appointed Prime Minister Naftali Bennett, was likely to cause a crisis with the PA, who took action against similar measures in the past.
Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through Israeli ports, and then it transfers the money to the PA.