Palestine cuts staff pay in half amid financial crisis

RAMALLAH, Palestine

The Palestinian government on Thursday said it will pay its employees half of their salary for the month of May, amid the decline in the country’s revenues.

Shukri Bishara, Palestinian finance minister, said in a news conference in Ramallah that the payment of half salary will continue in the coming period "as long as the tax revenues crisis continues."

In June, the Palestinian Authority refused to receive the tax revenues from Israel, as latter conditioned the transfer of the tax revenues in return for coordination between the two sides.

President Mahmoud Abbas had made the decision of suspending coordination with Israel, after the latter announced its plans to annex portions of the occupied West Bank, including the Jordan Valley.

The tax revenues -- known in Palestine and Israel as maqasa -- are collected by the Israeli government on behalf of the PA on Palestinian imports and exports.

The tax revenues are estimated at $200 million each month, as Israel deducts around $40 million for services on Palestinian exports and imports and the electricity bill.

These taxes represent 63% of the PA's public revenues.

The Palestinian government also suffers a severe decrease in domestic revenues due to the lockdown of economic activities amid the coronavirus pandemic.

The Palestinian government failed to pay in full the May salary to its some 133,600 employees, along with the retirees payments, the monthly stipends to the families of Palestinian prisoners and martyrs and the social security benefits.

* Ahmed Asmar contributed to this report from Ankara