A legal memorandum published Wednesday night for the first time seeks to amend the Income Tax Ordinance, so that the tax benefits granted to businesses in the fields of industry, agriculture and tourism will also apply to businesses in West Bank settlements.
This is a joint initiative involving several government agencies working, according to officials, to correct a distortion in the law.
The initiative began after residents living in the West Bank claimed they were being discriminated against, and even petitioned the High Court of Justice on the subject in 2013.
Until now, residents of the West Bank paid taxes but did not receive tax benefits in the above-mentioned categories. Now the government wants all the tax benefits to apply to all territories beyond the Green Line. This would be a precarious move that could provoke harsh criticism, partly due to the application of Israeli law and granting benefits to contested areas.
According to the memorandum, existing legislation cannot apply the tax benefits and other incentives in these fields to the West Bank settlements. However, settlers do enjoy benefits given as part of a program to incentivize capital investments in the area.
Because Israeli citizens living beyond the Green Line are subject to all of the commitments and obligations as Israelis living within the Green Line, the memorandum argues that the settlers should receive the aforementioned tax benefits as well.