Israel, Palestinians reach tax deal

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JERUSALEM, Aug. 1 (UPI) -- Israel and the Palestinian Authority agreed on bilateral trade and tax procedures to ease trade and reduce tax evasion, officials said.

Israeli Finance Minister Yuval Steinitz and Palestinian Prime Minister Salam Fayyad signed an agreement Tuesday, The Jerusalem Post reported Wednesday.

The agreement followed a series of secret meetings and will take effect Jan. 1, Haaretz said. A team of experts from both sides will monitor implementation, the Tel Aviv newspaper said.

"The cooperation between our two tax authorities will assist in fighting tax evasion, in increasing the revenues of the Palestinian Authority from the proper collection of taxes and in reducing illegal trade," the Post quoted Steinitz as telling reporters.

"These arrangements will also improve the economic relations between the Palestinian Authority and Israel," the newspaper quoted Fayyad as saying.

The agreement will use advanced technologies for monitoring and exchanging information on the transfer of goods rather than calculating tax clearances on reported transfers, the newspaper said. Palestinian storage facilities and the construction of pipelines to facilitate the transfer of petroleum products from Israel to the PA are also planned, the Post said.