Palestinian Authority President Mahmoud Abbas gestures during a meeting, in the West Bank city of Ramallah, Aug. 18, 2020. Photo: Reuters / Mohamad Torokman / Pool.

Israel’s security cabinet on Sunday voted to withhold almost $180 million from tax revenue that the country collects on behalf of the Palestinian Authority (PA), to offset funds paid to families of Palestinian terrorists.

The $176 million will be deducted in 12 monthly installments over the next year, Israel’s Kan broadcaster reported. In accordance with a law passed in 2018, each year Israel calculates how much the PA has paid in stipends to the families of terrorists if they are killed or are jailed in Israeli prison, and deducts the sum from the taxes it has collected for the authority.

The stipends for terrorists and their families have been labelled by critics as a “pay for slay” policy that rewards violence, while Palestinians have hailed them as so-called martyr payments. The PA argues that the payments are needed to help sustain families if a breadwinner has been killed or is incarcerated. A 2018 report by the Jerusalem Center for Public Affairs found that the PA spent more than $330 million in payments for killed or jailed Palestinians and their relatives.

Sunday’s move was criticized by Palestinian leaders, with Palestinian Liberation Organization (PLO) official Hussein Al Sheikh in a tweet calling it an act of “money piracy” intended to  “further embed the policy of financial blockade and steal our money in a step that adds to the daily escalation in our cities, villages and camps and the legalization of our bloodshed.”

In recent years, the PA has come under pressure from the international community, including a group of US Republican lawmakers, to withhold the stipends. In 2018, the Taylor Force Act was passed with bipartisan support to restrict non-humanitarian US aid to the Palestinian Authority if it continues to make payments to security prisoners and their families.