finance
US Considers Redirecting Israeli-Held Palestinian Tax Funds to Gaza Rebuilding
The Trump administration is considering asking Israel to divert a portion of withheld Palestinian tax revenues to a U.S.-backed transitional authority for post-war Gaza reconstruction. Sources said the proposal could also direct some funds to the Palestinian Authority contingent on reforms. The Palestinian Authority estimates $5 billion in tax money is currently being withheld.
May 15, 9:11 PM·2m read5 sources
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Japan TimesAudio version
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The U.S. is considering asking Israel to redirect some of the tax revenues it withholds from the Palestinian Authority toward funding President Donald Trump's post-war plan for Gaza, according to five sources familiar with the matter. The Trump administration has not yet decided whether to make a formal request to Israel, three officials with knowledge of the deliberations said.
The proposal under discussion would send a portion of the funds to a U.S.-backed transitional government for Gaza while directing other money to the Palestinian Authority if it implements reforms. The Palestinian Authority estimates the amount of tax revenue currently being withheld at $5 billion.
The prospect of repurposing these funds, which originate from Palestinian taxpayers, could further sideline the Palestinian Authority in any governance arrangements for Gaza. Discussions remain at an early stage. The two Palestinian sources with knowledge of the deliberations described the potential arrangement as one element of broader talks between the U.S. and Israel on Gaza's future.
Israel collects tax revenues on behalf of the Palestinian Authority and has periodically withheld transfers during periods of heightened tension. The current withholding totals an estimated $5 billion according to Palestinian figures. Any redirection of these funds would require coordination between Israel, the U.S. and any transitional body established for Gaza.
Officials have not detailed the exact split between a transitional government and the Palestinian Authority under the proposal. The idea forms part of ongoing U.S. efforts to shape reconstruction plans following the end of major hostilities in Gaza.
No final decisions have been made on the structure of governance or funding mechanisms.
Redirecting the tax money could reduce the Palestinian Authority's financial leverage and influence over Gaza's reconstruction. Palestinian officials have expressed concern that such moves would marginalize the Authority further in decisions about the territory's future.
