"Smotrich" Angers "Israelis" by Offering Tax Benefits to West Bank Settlements at the Expense of the North

SadaNews Economy - The proposal by Israeli Finance Minister "Bezalel Smotrich" regarding granting tax exemptions to the "municipalities" of settlements in the West Bank has sparked a storm in the Knesset. The Knesset Finance Committee discussed adding 149 "municipalities" from the West Bank to a list of around 400 municipalities near the border and its surrounding areas, which receive varying degrees of tax exemptions on income, amid complete opposition from the "elite" in the Ministry of Finance and protests from Knesset members, not just from the opposition.

Initially, "Smotrich" sought to include the settlements in the northern areas in the new benefits law, but since it was a change in the law, he feared that it might delay the approval of the areas in the West Bank, as the "law" would be defined as "new". Therefore, the northern areas were excluded for now, which raised significant uproar among coalition members as well, according to SadaNews Economy's translation.

Sources in the Ministry of Finance told the Hebrew newspaper "Yediot Ahronot" that "it is unreasonable for a settlement located two kilometers from the Green Line to receive a tax exemption while another settlement located on the same Green Line but within 'Israel' is deprived of it.

Among the areas proposed to receive tax benefits, according to the report, which should be seen as a deduction from income tax payments: 7% for Adora, 10% for Avigail and Alon Moreh, and 12% for Mitzpeh Jericho. It is noteworthy that "Smotrich" himself resides in the West Bank and thus will benefit from these advantages.

It is also worth mentioning that some "settlements" will receive higher tax benefits than those received by the settlements in the Gaza envelope, while in the north, most settlements not directly on the border currently do not receive any tax benefits, but face risks due to Hezbollah's shelling and the threat of drones.

This morning, shortly before the Finance Committee's discussion on tax benefits in the West Bank, the Ministry of Finance sent a new list of sites, the number of which is still unclear to Knesset members, according to SadaNews Economy's translation.

The Israeli government was supposed to discuss yesterday "reconstruction of the north and its defense", focusing on several key proposals: granting tax exemptions to all settlements located along the front line; protecting houses along the front line, including settlements adjacent to the border fence; rehabilitating vital health systems, providing mental health services, emergency aid to businesses, and more. However, this issue was removed from the agenda at the last minute, causing discontent among local council heads in the area, and it was claimed that it would be raised in the government meeting tomorrow.

Moshe Davidovich, head of the Mateh Asher Regional Council and head of the Conflict Line Forum, says: "It seems extremely absurd: in the explanatory memorandum of the government's decision that was excluded from the agenda, a grim picture was painted of the demographic decline, negative migration, falling wages, damage to businesses, a sharp decline in tourism, and the incomplete return of families and children to the north. In other words, the government is fully aware of the depth of the crisis, yet chooses to exclude decisions that were supposed to address it from the agenda."

He clarified, saying: "This is not a financial or legal matter; everything has been agreed upon in the presence of specialists, and delaying decisions related to rehabilitation, protection, and tax exemptions along the entire conflict line due to a political whim or anger is a severe harm to the residents of the conflict line and the national interest."

The Israeli government stated that the reason for excluding the northern issue from the agenda and postponing it to a special meeting is "to allow two additional days for the Ministry of Finance" to prepare all decisions.

According to SadaNews Economy's translation, "the northern region has been suffering from a crisis for nearly three years, but the government clarified that the Ministry of Finance has not yet completed the five-year plan, 'which was on the agenda', and that there are other decisions such as tax exemptions and comprehensive protection for the north."

The government also claimed that due to the desire of the heads of authorities to "unify everything", they granted the Treasury a deadline until Tuesday to complete all their decisions and budgets.