This position paper comes in response to the government’s plans to hold a vote in the Ministerial Committee for Legislative Affairs on MK Ariel Kellner’s (Likud) bill to amend the Income Tax Ordinance in order to tax donations from a foreign political entity.
According to the proposed bill, an NGO receiving a donation consistent with the terms specified in the bill will be excluded from the definition of “public institution” under Article 9(2)(b) of the ordinance. The NGO will lose its recognition as a public institution under any and all laws, with such attendant implications as donors no longer being entitled to a tax credit based on Article 46 of the ordinance. The bill also proposes to establish that an NGO receiving a donation from a foreign political entity consistent with the terms specified in the bill will be liable for a 65% tax rate on its income.
- The bill aims to impose economic sanctions on human and civil rights NGOs critical of the government and bring about their closure, which is a clear hallmark of authoritarian regimes.
- It was submitted by MK Kellner as a private bill, similar to other bills of the regime revolution, to allow Prime Minister Netanyahu to evade any personal responsibility (given the international criticism against him, especially by the United States).
- This was no independent initiative by MK Kellner. Back in November 2022, Finance Minister Bezalel Smotrich (Religious Zionism) said that these organizations were an existential threat to Israel and that the government must seize their funds.
- The bill’s explanatory notes do not try to hide its anti-democratic purpose and overtly state as much: “The bill seeks to reduce, through taxation, the involvement of foreign political entities in Israel’s democracy.”
- It violates the principle of equality by “targeting” human and civil rights NGOs, which are mostly funded by donor countries or foundations, whereas right-wing NGOs are usually supported by foreign tycoons and will therefore be unaffected.
- Obviously, had the intention not been to specifically “target” human and civil rights NGOs critical of the government, a bill would have been introduced to tax all donations, regardless of whether they came from a state or a private entity.
- The proposed bill will apply to “a donation that interferes in Israel’s internal affairs,” which broadly defines a donation to almost any type of public activity. Its basic premise is that sanctions should be imposed on NGOs trying to expose and stop human and civil rights violations in the Occupied Palestinian Territories and to provide relief to the victims.
- What happens in the OPT is a matter of international interest, given that Israel has repeatedly declared at international forums and in response to Supreme Court petitions that this is territory under “belligerent seizure” that remains unannexed.
- Nor are violations of human and civil rights within the State of Israel’s recognized sovereign territory considered an “internal matter” either, due to the fact that Israel is a signatory of numerous international treaties and a member of the United Nations.
- The bill is intended to harm population groups in the OPT and within the State of Israel. It will not only affect Palestinians in the West Bank and the Gaza Strip, but also NGOs protecting the rights of women, LGBTQs, asylum seekers, the poor, disabled persons, Ethiopian immigrants, victims of police violence, and more.
- It infringes on the fundamental rights of activists, volunteers, and workers of NGOs recognized in Supreme Court rulings and international treaties signed by Israel, in particular the rights to freedom of expression, association, and occupation.
- It violates the principles of the UN Declaration on the Right and Responsibility of Individuals, Groups and Organs of Society To Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms.
- It will also harm Israeli men and women who are not active in NGOs or receive any services from them, as it will strengthen the delegitimization and political persecution of the opposition and government critics in Israel.