Arab League Urges Israel to Release Blocked Palestinian Tax Funds

The Arab League has declared that providing financial backing to the Palestinian Government is no longer just a form of humanitarian aid, but a critical necessity to sustain national institutions and bolster the resilience of the Palestinian people amid compounding economic and political challenges.

This declaration was delivered during the Palestine Donor Group’s ministerial and high-level meeting held in Brussels. Assistant Secretary-General and Head of the Palestine and Occupied Arab Territories Sector, Ambassador Faed Mustafa, addressed the summit on behalf of Arab League Secretary-General Nabil Fahmy. The high-profile conference, co-hosted by the European Union, drew delegations from more than 70 countries and international organizations, alongside Palestinian Prime Minister Dr. Mohammad Mustafa.

An Unprecedented Fiscal Emergency

In his address, Ambassador Mustafa warned that the Palestinian Government is grappling with a severe, unprecedented financial crisis driven primarily by Israeli economic restrictions. Foremost among these punitive measures is Israel’s ongoing withholding of Palestinian clearance revenues—customs duties and tax funds collected by Israel on behalf of the Palestinian Authority—as well as illegal unilateral deductions.

Coupled with strict limitations on movement and trade, and the destruction of local economic infrastructure, these policies have severely slashed public revenues. The resulting economic strangulation has triggered skyrocketing poverty and unemployment rates, pushing public institutions to the brink of collapse and threatening their capacity to deliver vital healthcare, education, and social protection services.

Tax Withholding as a Political Tool

The Arab League representative stressed that the freezing of clearance revenues is far from a mere administrative or financial dispute. Instead, it constitutes a direct violation of international treaties and bilateral accords, utilizing economic leverage as a tool for political coercion.

"Sustaining the functionality of Palestinian state institutions, particularly across vital public sectors like health, education, and social safety nets, requires immediate and predictable financial injections to the Palestinian government," Ambassador Mustafa asserted.

Praise for International Donors and the European Union

The Arab League expressed deep appreciation to the international donor community and individual states that have sustained their support for the Palestinian people. Particular praise was directed at the European Union and its member states for their continuous political, humanitarian, and financial solidarity.

Ambassador Mustafa called on the international community to transition toward more stable, sustainable, and predictable financial partnerships. Such structured mechanisms would empower the Palestinian Government to implement long-term developmental plans and rebuild its institutional resilience.

The address concluded by reaffirming that temporary financial aid cannot substitute for a comprehensive political resolution. The Arab League reiterated that lasting peace and stability in the region can only be achieved by ending the occupation and establishing an independent, sovereign Palestinian state.