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A controversial bill promising tax exemptions for organizations that make "Zionist" donations to new communities is set to receive government backing.

The Ministerial Committee for Legislation decided on Sunday that the coalition will support the bill, designed to help establish new communities. The bill's sponsors coalition chairman, MK Zeev Elkin (Likud ), and MK Zion Pinyan (Likud ), deny the bill is meant to support settlements in the occupied territories, and claim it would also help establish new towns and communities in the Negev and Galilee.

But the wording of the bill does not make a distinction between settlements in the West Bank and new communities in the Negev and Galilee, causing political sources to insist that, ultimately, the bill's purpose is to support organizations that fund settlements.

The bill would make 35 percent of the donations tax-free.

Elkin and Pinyan explained on Sunday that "among the various objectives, one notices the conspicuous absence of strengthening Zionism and supporting Zionist settlement activity. These objectives should once again be supported."

Elkin said Sunday: "Presenting the bill as legislation supporting the settlements in Judea and Samaria is a mistake. Amana [the Gush Emunim settlement organization] is already enjoying such tax exemptions. The new bill will include, among other things, the settling of Bedouin in areas approved by the government.

"I'm pleased that the government has now decided that supporting communities in the Negev and Galilee is as important as supporting cultural and religious activities," Elkin added. "This puts an end to the absurd situation where the Islamic Movement enjoys tax exemptions for donations to build mosques, while movements such as Ayalim and Or, supporting new communities in the Negev and Galilee, are deprived."

Peace Now director Yariv Oppenheimer slammed the proposed legislation. "This bill will create a scathing discrimination based on ideology," he said. "Those supporting settlements will receive tax exemptions, and those who oppose them will not. And all citizens, left and right, will pay the price."

At present, donors to organizations that are endorsed by the Finance Ministry and are active in areas such as religion, culture, education, science, health, sport and assistance to the poor, receive tax exemptions.

Donors to many left-leaning organizations, such as the Peres Center for Peace and Peace Now, do not receive exemptions under existing legislation.

If the bill does include pro-settlement organizations, it would be in direct opposition to a pledge given in 2004 to the United States by Prime Minister Ariel Sharon.