Israel’s Supreme Court last week rejected a petition by a Palestinian educational NGO to receive a tax exemption, usually provided to groups with a “public purpose,” on the grounds that they do not have an “affinity to Israel.”
The non-governmental organization, The Committee for Islamic Sciences and Education, runs a school in the village of Bir Naballah, north of Jerusalem in Area C of the West Bank, which is under full Israeli civilian and military control.
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Justice David Mintz said that while “the education of the children of Bir Naballah is indeed a worthy goal, it is not in line with the requirement of ‘affinity’ to Israel, nor does it come under one of the exceptions of national interest or a specific humanitarian activity.”
The ruling added that “public purpose” is restricted to “institutions working for the inhabitants of Israel, or toward goals the state seeks to promote,” and that the association does not meet these criteria.
The panel, which also consisted of Justices Alex Stein and Isaac Amit, also rejected the association’s argument to recognize activities in Area C as public activities in Israel for the purpose of a tax exemption, because Israel maintains full control over the area. According to the ruling, the Oslo accords devolved the realm of education in Area C to the Palestinian Authority, thereby exempting Israel from responsibility.
The Committee for Islamic Sciences and Education has been active since 1992. Until 2004, it ran kindergartens and schools in Shoafat and Beit Hanina, which are within Jerusalem’s municipal boundaries, and in the village of Bir Naballah, in Area C. In 2004, the association ceased its activities in Jerusalem, and then continued to operate only the school in Bir Naballah. At the same time, it rented out a few buildings in Shoafat and Beit Hanina to an educational association.
In January 2017, the Jerusalem tax authority rejected the NGO’s claim for a tax exemption as a public institution for 2 million shekels it received in the rent, arguing its activity in Jerusalem is limited to renting buildings, while the educational activities it carries out in Bir Naballah are not associated with Israel. The organization appealed the decision to the Jerusalem District Court in October 2020, which confirmed the tax authority’s position.
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The organization then appealed the ruling to the Supreme Court, stating that the District Court had erred in determining that the activity in Bir Naballah is not for a “public purpose,” as defined by the tax law.
According to the organization, its very registration in Israel in 1992 would suffice in meeting the condition of “affiliation.” They also added the village of Bir Naballah is in Area C of the West Bank, which is under full Israeli civilian and military control.
Justice Mintz, however, wrote in his ruling that the definition of “public institution” in the tax code should be interpreted narrowly. “Just as the state treasury is intended to serve the citizens and residents of the country, so too the tax exemption to public institutions is intended to serve the state and its residents. The ‘public’ to which the section refers, in general, is the Israeli public,” Mintz ruled.
He added that the NGO’s activities in Jerusalem ceased in 2004 and that there was “no evidence that there are Israeli students in Bir Naballah.”
Att. Moshe Mizrahi, representing the NGO in the petition, said “the Supreme Court has missed an opportunity to establish a fairer approach to Israel’s control of Area C. An Israeli NGO dealing with the education of children five minutes from Jerusalem is ineligible for a benefit given to organizations in Israel caring for the education of children in South America.”
“The NGO’s connection to the state should also be examined from the viewpoint of the Arab minority, which has an interest in the education of its family members and neighbors behind the separation barrier, and not only [from the viewpoint] of the Jewish majority, as the ruling does,” he added.
Following its ruling, the Supreme Court ordered the association to pay the court costs of the Jerusalem tax authority, a total of 30,000 shekels.
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