Livni to Lapid: Don't Provide Tax Breaks for 35 Isolated Settlements

Tensions run high at cabinet meeting as ministers debate move that Livni says would encourage increased settlement in the West Bank.

Justice Minister Tzipi Livni and Economy Minister Naftali Bennett lashed out at one another during the weekly cabinet meeting on Sunday, as the ministers were presented a report on anti-Semitism formulated by the Diaspora Affairs Ministry, which Bennett heads.

The minsters' verbal joust began after Tourism Minister Uzi Landau said that anti-Semitism motivates criticism of Israel's policy in the settlements, among other things. Livni responded by saying that such a view undermines the battle against anti-Semitism and drives a wedge between Israel and important allies accused of being anti-Semitic due to their anti-settlements stance.

"Those who don’t want a diplomatic agreement find refuge in the in the claim that criticism of Israel stems from anti-Semitism," Livni said. "Will future criticism against government-sanctioned tax benefits for isolated settlements be anti-Semitism? No. It's criticism of a decision that encourages relocation to settlements that the world doesn't recognize as Israeli territory."

Bennett responded with an attack on Livni, saying, "Globe-trotting and shouting about boycotts only increases pressure on Israel. If I'm in the midst of negotiations and in the meantime some among us beg 'boycott us,' it only weakens Israel."

Livni responded: "Let's say the truth, those who sit here and insist on building and encouraging isolated settlements are those who encourage an international boycott of Israel. Those who act for a diplomatic agreement are those who want to curb the boycott and the harm to Israeli economy."

In light of reservations that Livni raised, the ministers also decided to postpone a discussion about awarding 10 percent tax benefits to some 400 communities, including 35 settlements that are outside the main blocs. Settlement blocs refer to areas in the West Bank where the majority of Jewish communities are located: Ariel, Gush Etzion and Ma'aleh Adumim.

Livni told Finance Minister Yair Lapid, who suggested the tax break, and Prime Minister Benjamin Netanyahu that the proposal should not be voted on before further discussion. She stressed that such a discussion would have to go beyond technicalities and delve into the implications supporting those 35 settlements would have on Israel's international standing and the peace process with the Palestinians.

Livni told Lapid that strengthening areas outside central Israel is justified, but that "the isolated settlements shouldn't be lumped in." Livni offered Lapid to add a reservation to the proposal which will make the isolated settlements ineligible for tax breaks.

Lapid told Livni that the proposal simply levels the playing field regarding tax benefits in accordance with a High Court of Justice ruling, a source who attended the cabinet meeting told Haaretz. Lapid said that, for the first time, many Arab communities would also enjoy such benefits.

However, Livni rejected Lapid's argument, saying, "These criteria aim to encourage moving into isolated settlements."

According to the proposal communities eligible for the benefits must fulfill the following criteria: 

a. Geographic-demographic location – to what extent is the community considered to be an outlying area according to the Central Bureau of Statistics (CBS) data. 

b. Socio-economic status, according to the CBS.

c. Proximity to borders – communities 9 km from the Lebanon border or 7 km from other borders, including the fence around the Gaza Strip.

Based on these criteria, 35 settlements outside the main settlement blocs are eligible for benefits, mostly in the Jordan Valley and in the Hebron Hills area. They include Avnat, Adora, Almog, Argaman, Eshkolot, Beit Haarava, Gilgal, Vered Yericho, Hagai, Hemdat, Yafit, Carmel, Mehola, Maon, Beit Yatir, Mitzpe Shalem, Masua, Maskiot, Negohot, Niran, Naama, Nativ Hagdud, Susiya, Atniel, Pnei Hever, Pazael, Kalia, Kiryat Arba, Roee, Rotem, Shadmot Mehola, Shima, Tomer and Telem.

The purpose of the tax benefits, according to the proposal, is to strengthen the population in weaker communities, boost communities outside of central Israel and encourage increased habitation along Israel's borders.

The move, however, opposes understandings between Israel and the United States, which stipulate that Israel not use economic incentives to encourage Israelis to move into the settlements. 

A file photo of the Amona outpost.
Olivier Fitoussi
Olivier Fitoussi