A bill proposal to apply an 80% tax on “foreign state entity” donations to NGOs could create a boomerang effect and harm Israel’s ability to support Jewish organizations abroad, Knesset Immigration and Absorption Committee chairman Gilad Kariv warned on Wednesday.
The letter was addressed to Diaspora Affairs Minister Amichai Chikli, Foreign Minister Gideon Sa’ar, and Knesset Constitution Committee, Law, and Justice chairman Simcha Rothman.
According to the bill’s preamble, its purpose is to block “indirect influence by government and foreign state entities” by taxing donations to NGOs that act as “agents of change” on behalf of these entities.
The law, proposed by Likud MK Ariel Kallner, also states that the finance minister, with the approval of the Knesset Finance Committee, can award a tax exemption in “special circumstances.” Additionally, the law says the court system will not hear cases filed by NGOs whose “main funding” is from foreign state entities and who do not receive Israeli state funding.
The law passed a preliminary vote in February and is currently being prepared for its first reading in the Knesset Law Committee.
Israel Democracy Institute researchers wrote in February that the bill constituted an “attack against democracy” since most NGOs affected by the bill would be those that support human rights against government violations and that are critical of the current government. Many of these NGOs receive funding from the European Union and other Western countries, such as the US, UK, and Germany, and the law could potentially harm Israel’s standing among Western democracies, according to the researchers.
Israel Hayom’s Hanan Greenwald reported on May 5 that a number of European countries were “enraged” by the legislation and considering “retaliatory steps.” According to Greenwald, one of the steps being considered was a similar tax or stricter regulation on Israeli donations to Jewish organizations in their countries.
Kariv indicated that he opposed the bill in its own right but that, as head of the legislative committee “responsible, from the legislature’s perspective, for Israel’s relations with Jewish communities and institutions around the world,” it was his duty to warn of potential harm to Diaspora communities.
Kariv warns against damaging relationships between Israel and jews in the Diaspora
“Israel’s definition as the nation-state of the Jewish people and its centrality in Jewish life worldwide is reflected in its extensive and strong network of relations with Jewish communities, institutions, and organizations across the globe. These relationships are often expressed through collaborations, joint projects, and both direct and indirect financial support,” Kariv wrote.
“While a distinction can be made between the support provided by friendly states to civil society organizations in Israel and Israel’s support for the activities of Jewish organizations and institutions worldwide, there are also similarities in terms of one state supporting activities occurring in another country.
“In this sense, the proposed legislation, which is already facing condemnation from many friendly nations, could have a direct impact on Israel’s cooperation with Jewish communities, institutions, and organizations in those countries,” Kariv wrote.
The Immigration Committee chair revealed that “various international and local Jewish organizations have submitted concerns to me regarding the implications of the legislation on the policies of relevant governments in those countries, specifically concerning Israeli support for activities in the Diaspora.”
“This concern is not unfounded, and the Israeli Knesset is obligated to address it with full seriousness,” he wrote, adding that he intended to hold a committee meeting on the matter.