CAIRO: Arab League (AL) Secretary-General Ahmed Aboul-Gheit said on Sunday that the deficit in the Palestinian Authority (PA)'s budget has amounted to 700 million U.S. dollars due to the financial practices exercised by Israel.
Addressing an emergency meeting of the Arab finance ministers in Cairo, Aboul-Gheit said the PA suffers from limited financial resources and revenues, noting that tax proceeds account for 70 percent of Palestinian revenues, reports Xinhua.Aboul-Gheit said activating a monthly 100-million-dollar Arab financial safety network to boost the PA's budget has now become a necessity, according to Egyptian official MENA news agency.
The PA has been facing a severe financial crisis since Israel's decision to deduct funds from Palestinian tax revenues, on the pretext that the Authority pays financial dues to the families of killed Palestinians and prisoners in Israeli jails.
Originally, Israel deducted three percent of the total tax worth over one billion dollars a year. In February, Israel began to deduct about 10 million dollars in tax revenues collected for the PA.
The PA has refused to receive any amount of tax revenues from Israel, and has so far maintained its position that the funds must be transferred in full amount.