On Tuesday, the Knesset Finance Committee held a discussion following an article published in Israel Hayom about the "Palestinian container sting," according to which the state transfers more than NIS 1 billion in import taxes to the Palestinian Authority on the basis of false reports and without significant enforcement. During the hearing, Gil Haziz confirmed this fact from the Tax Authority.
Committee Chairman MK Moshe Gafni responded: "It's delusional. Let the finance minister examine changing the calculation method." When asked by MK Avichai Boaron, Col. Elad Goren replied that there is no political impediment to changing the regulations.
The article, which was based on a Freedom of Information request by Lavi, revealed that the State of Israel transfers to the Palestinian Authority the customs taxes of containers that Palestinian importers report are destined for PA territory, but in practice they do not reach there. Logic holds that the transfer of taxes should be calculated not according to the importer's report, but according to the containers that actually go to the authority.
Chairman of the Moshe Gafni Committee (Archive), Photo: Oren Ben Hakon
Gil Haziz, director of customs at land border crossings at the Tax Authority, explained during the discussion that "as part of the Paris Agreement, it was agreed between Israel and the PA that taxes would be transferred to them according to a report received. At that time, there were no crossings between us because there was no separation fence, so that was the practice. The calculation is determined according to the report of the Palestinian importer."
Haziz said that an importer caught acting fraudulently took a deposit of 50,100-<>,<> shekels. Boaron told him in response: "You understand that he makes a profit, that the non-container costs much, much more." Committee Chairman MK Gafni asked: "On the political issue, could it be that you don't want to deal with the PA and turn a blind eye?" Haziz denied this: "We have no unknown interest vis-à-vis the PA, I am not familiar with such a directive. It is the political agreements that are restrictive. We recently set up a think tank on how to improve enforcement." Col. Elad Goren, head of the civilian department in the Defense Ministry, also ruled out a hidden interest vis-à-vis the Palestinian Authority and said there was nothing preventing a change in the calculation method.
Attorney Pinchas Anzlovitz of the Kohelet Forum, who filed a petition on the matter, said: "There was a technical problem in the 90s in the absence of a fence, but the situation has changed. The implementing laws of the Paris Agreement say that Israel should transfer money according to goods entering the PA, not Israel. The law is not upheld."
MK Avichai Boaron (archive photo),
MK Boaron, who initiated the discussion, protested to state officials. "There has been a failure here since 2011, and no one has given their opinion on it. In 2020, the comptroller warned about this, and for 13 years no one stood up and said that the State of Israel is losing billions of shekels. Are we crazy?" Finance Ministry members: "If the finance minister passes a regulation that there is no money going to the PA, if there is no evidence that the container was physically transferred, we have solved the problem."
Following Boaron's comment, Gafni concluded the discussion and instructed Finance Ministry officials to contact Finance Minister Bezalel Smotrich and find out whether he intends to change the calculation method in light of the discussion and the data. "These are huge sums, because if it were a different case, the Finance Ministry would have turned the whole world on it. It's incomprehensible. There is a black economy here, there is no VAT payment or anything. This is a problematic reality that the State Comptroller is also required to address, the situation is a bit delusional. MK Boaron is right, the facts scream. We will wait for the Finance Minister's response on the matter."
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