ACRI submitted a petition on 17.7.05 to the Supreme Court against the Ministry of Finance to demand the cancellation of the amendment to the tax ordinance that grants a tax rebate to a number of towns that were chosen arbitrarily and with no specific criteria. The petition makes clear that the decision results in a severe violation of the basic right to equality, and is in direct contravention to the position of the Attorney General who cautioned that the law creates a situation of illegitimate discrimination. The petition was submitted by ACRI Attorney Auni Banna, and lays special emphasis on the fact that the fundamental nature of the law is the preference of certain towns over others, including all Arab towns, and the allocation of financial rebates from the state treasury for narrow party-political considerations and with no substantive justification.
The amendment under discussion is amendment 146 of the Tax Ordinance endorsed by the Knesset on 20.6.05, which grants a tax rebate of 13% to the towns listed in the text of the amendment. The amended law, from the outset, was designed to assist and “strengthen” towns “whose residential structures are located up to 7km from the security fence surrounding the Gaza Strip”. After the draft legislation passed the first reading in the Knesset, the Knesset Finance Committee introduced a series of changes which included the addition of other towns to the aforementioned list. The following are the newly added towns that are now entitled to the rebated: Hazor HaGalilit, Beit Shean, Arad, and towns within the municipal boundaries of the Arava and Eilut. The additional towns are situated in different geographical locations within Israel, none of which are adjacent to the Gaza Strip. After all opposition to the addition of these towns, including that of the Minister of Justice, who called for them to be removed from the list, was overturned, and after reservations expressed by Arab Members of Knesset as to the size of the reduction and to the choice of additional towns, the Knesset plenum endorsed the draft legislation in its second and third reading.
Attorney Banna claims in the petition, that the circumstances of the law`s enactment clearly shows that the additional towns were decided upon on the basis of party-political considerations, and includes a violation of the legal right to equality. These factors, in combination with the discussion that took place in the Knesset Finance Committee in relation to the proposed legislation, and various reports in the media, indicate that the purpose of granting the rebate to the additional towns is a political payoff for the Likud who represent a clear majority of the residents of these towns. Another illustration of these illegitimate considerations is the total lack of justification for adding the extra towns which do not comply with the criteria for entitlement that are fundamental to the law (i.e., a close proximity to the Gaza Strip).
The implementation of the law, the petition states, discriminates against the towns that are no less in need of state financial aid, and are not included in the list of additional towns. As set forth above, the list was determined arbitrarily and was not based on substantive criteria that could justify the decision to grant rebates to these towns at the expense of other towns in Israel, is not based on factual considerations, and was certainly not prefaced by any investigation or field research that reflects the seriousness of the impact of this preferential treatment. It should also be noted that the list of eligible towns does not even include residential areas that are located in geographical proximity to those originally chosen, and whose socio-economic position is no less problematic. The extent to which the law undermines Arab towns, none of which are included in the amended list, but are included in the group of communal towns that are defined as “weak”, should also be emphasized. The law discriminates against Arab communities by granting significant tax rebates to Jewish towns only. This is particularly pertinent when one considers that according to the financial and cultural parameters defined by the state, the socio-economic position of Arab towns is extremely serious. In such a reality, the failure to include Arab towns as eligible for the rebate adds another layer to the historical discrimination of these communities in the allocation of public funds and rebates from the state treasury. The non-inclusion of Arab towns discriminates against the Arab community in two ways, firstly through their residence in a group of towns defined as “weak”, which are not eligible for the rebate, and secondly by discrimination that is based on their national origins.
The inclusion of additional towns on the list of those eligible for the rebate, concludes Attorney Banna, is irrational, disproportionate, and violates the legal right to equality. Thus the court is asked to order the exclusion of these additional towns form the list of towns eligible for legally ratified tax rebates.
last updated : 20/07/05
