Israel's Top Court Backs Tax-exempt Status for Christian Missionary Group

The High Court overturns a Knesset decision to deny tax benefits to an organization on account of it being 'publicly controversial'

Netael Bandel
Netael Bandel
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High Court justices in January.
High Court justices in January.Credit: Ohad Zwigenberg
Netael Bandel
Netael Bandel

The High Court of Justice on Tuesday overturned a decision of the Knesset Finance Committee to deny tax-exempt status to a Christian-missionary non-profit organization. The court ruled that the committee had deviated from its legal authority.

The ruling referred to a petition by the Yachad Ramat Hasharon non-profit organization, a Messianic Jewish congregation, against a November decision by the finance committee. The 15 committee members, including seven then-opposition members, supported the decision to deny tax benefits.

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One committee member who supported the committee's decision to deny tax benefits was Foreign Minister Yair Lapid, then the opposition leader. Lapid explained that the community is involved in missionary work. He said there are still fewer Jews than there were before the Holocaust, and that Jewish people have a right to protect themselves. Committee chairman Moshe Gafni said the decision was made because these organizations are involved in missionary work to convert Jews, which is why the committee opposed their tax-exempt status.

High Court Justices Daphne Barak Erez, Yitzhak Amit and Anat Baron rejected the committee’s decision. Erez explained that disqualifying an NGO on account of its being “publicly controversial” constitutes a deviation from the committee's authority. Barak Erez explained that “interpretation ... that depends on a worldview does not accord with the principle of equality, just as it does not accord with freedom of religion and conscience. … Implementing the criterion of being ‘publicly controversial’ is likely to lead to a distinction among various religions and faiths, in particular those belonging to minority groups lacking representation on the political playing field.”

Barak Erez added that the authority of Knesset approval relates only to whether the finance minister and the Tax Authority approved the tax benefits to the NGO according to legal criteria, and that a change to the criteria requires new legislation. She said that the decision arouses a greater fear of possible negative exploitation, including discrimination and arbitrariness, especially for political reasons.

Yair Lapid at a Knesset Finance Committee meeting in October Credit: Shmulik Grossman / Knesset Spokesperson's Office

Israel's Income Tax Ordinance authorizes the finance minister to grant tax benefits, with the approval of the finance committee, to donors to NGOs involved in “religion, culture, education, encouragement of settlement, science, health, welfare or sports.” The minister is also allowed to revoke such eligibility if it finds that a substantial part of the NGO’s goals does not meet the legal criteria.

Last year, the Knesset adopted a regulation allowing for refusal of tax benefits if the NGO is “publicly controversial.” Attorney General Avichai Mendelblit opposed the regulation, which was supported by the Knesset legal adviser, Sagit Afik. Her representative said that the criterion of “publicly controversial” could lead to politicization regarding specific NGOs.

Afik explained that approval by two-thirds of the Finance Committee, a third of which is composed of opposition members, would make it possible to decide whether the NGO is publicly controversial. In their decision, the justices determined that the ruling does not include cancellation of the regulation because this was not mentioned in the petition.

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