On 7 July 2007, the Supreme Court of Israel held a hearing on two petitions, one filed by Attorney Hassan Jabareen, the General Director of Adalah, and the other filed by Attorney Awnie Bana from the Association for Civil Rights in Israel, demanding clear, consistent and equitable criteria for awarding tax benefits to towns and villages in the Naqab (Negev). At the hearing, the court ordered the state to provide revised information within four months regarding an amendment to the law and the setting of clear, consistent and equitable criteria for all.

Adalah Attorney Sawsan Zaher argued at the hearing that towns located close to the Gaza Strip were granted tax benefits by law, “to provide relief to the residents of these towns due to the difficult security situation that prevails in their area,” as Amendment no. 146 to the Income Tax Law of 2005 stipulates. However, in reality these tax benefits are also provided to other Jewish towns in the Naqab that are located hundreds of kilometers from the Gaza Strip, some of which are situated in close proximity to Israel’s eastern border with Jordan. The only towns that were excluded from these benefits were Arab Bedouin towns – Laqiyya, Shaqib al-Salam (Segev Shalom), Hura, Kseiffe and Rahat – despite the fact that these villages are located in the same geographical area as the towns that do receive the tax benefits. Therefore, Adalah argued on behalf of municipal leaders and citizens residing in the Arab Bedouin towns in the Naqab that the exclusion of these towns from the list of towns that enjoy these benefits is illegal and constitutes blatant discrimination against Arab citizens.

In the petition filed in July 2005, Adalah emphasized the importance of taking into consideration socio-economic conditions when awarding tax benefits to towns and villages. A group of towns that receive the tax benefits suffer from a poor socio-economic status, and taking this status into account is in itself legitimate. Tax benefits are generally awarded in order to provide assistance to poorer and economically marginalized towns in order to help them to become more prosperous, and their socio-economic status should be taken into account in an equitable manner, as with other criteria. However, the socio-economic situation of the towns that were excluded from the income tax benefits is far worse than that of the other towns that received them. Therefore it is the duty of the state not to discriminate between Jewish and Arab towns in the allocation of tax benefits on the basis of socio-economic status, and not to give priority to “security” over other motives in this allocation in the allocation of the tax benefits, because this is in breach of the principle of equality.

H.C. 6901/05, Mayor of Rahat Municipality, et. al. v. Minister of Finance, et. al. (case pending)

For more information, see Adalah News Update, “Adalah and Arab Local Councils Petition Supreme Court Against Discriminatory Law Which Excludes Arab Bedouin Towns from Income Tax Benefits,” 27 July 2005.