Israel debates 80% tax on foreign donations to NGOs

Reuters

05-05-2025

JERUSALEM, May 5 (Reuters) - An Israeli parliamentary committee on Monday began debate on a law that would impose an 80% tax on non-government organisations that receive the majority of their funding from foreign entities in a bid to reduce foreign influence on the state.
Under the proposed law, these NGOs would not be able to petition Israeli courts, including the Supreme Court. Israel's finance minister, though, would be able to grant an exemption from the tax.
The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here.
Organisations funded by the Israeli state and those with an annual turnover of below 100,000 shekels ($27,668.64) would be exempted.
The debate in the Knesset's Constitution, Law and Justice Committee was at times heated and divided along coalition lines. The panel is preparing the bill for a first reading in the main plenum.
"This law will preserve a Jewish state and a democratic regime, and will block improper foreign interference," said Ariel Kallner, the bill's sponsor, during the debate.
Kallner noted that between 2012 and 2024, 1.3 billion shekels was transferred from overseas to 83 Israeli organisations, or an average of about 300,000 shekels per day.
"These funds are not designated for social, educational, or peripheral development projects, but primarily for influencing Israeli policy through the judicial system, media, and international arena," he said, adding "the future of the State of Israel should be shaped by Israeli citizens, not foreign governments."
Opposition lawmakers criticised the proposed law, saying the state was trying to stifle voices, including the media, that don't agree with Israel's policies. Some said that if the government sought to prevent foreign influence, then companies should also be targeted.
Adalah, the Legal Center for Arab Minority Rights in Israel, sent a letter signed by nine NGOs to the head of the committee, urging the bill be halted.
"This bill is a direct assault on civil society, the rule of law, and the basic constitutional structure of Israel's democracy," the letter said. "It threatens the rights of individuals and communities and seeks to silence legitimate dissent under the guise of sovereignty."
($1 = 3.6136 shekels)
($1 = 3.6142 shekels)
Reporting by Steven Scheer Additional reporting by Nuha Sharaf; Editing by Sharon Singleton
Our Standards: The Thomson Reuters Trust Principles., opens new tab