Bezalel Smotrich
Bezalel SmotrichMiriam Alster/Flash 90

The Knesset Finance Committee on Wednesday evening approved for its second and third readings the JNF Law, which would oblige the Jewish National Fund (JNF) to transfer annual sums of money to state coffers to fund national infrastructure projects.

The law states that the JNF has two options: The first would be to transfer to the state 2 billion shekels (65% of the JNF's income) in the years 2018 and 2019 (one billion shekels each year), and then to receive tax exemptions until the end of 2023. The second option would be to arrange its tax payments in installments starting January 1, 2018.

In any event, according to the bill, starting January 1, 2024, all the exemptions given to the JNF will be canceled and it will pay taxes in full. The discussions that led to the approval of the law were particularly stormy and were stopped many times in order to reach compromises.

Opponents of the law argued that it essentially nationalizes the JNF and harms the organization's Zionist activities, while its supporters argued that the JNF operates in a non-transparent manner, both in budgetary matters as well as in its sphere of activity.

Due to the opposition of MK Bezalel Smotrich and the other members of the Jewish Home to the initial legislation promoted by the government, intensive negotiations were held between the parties, at the end of which it was agreed to soften the law initiated by the Finance Ministry.

According to the agreements approved Wednesday evening by the Knesset Finance Committee, the JNF will not be "nationalized", it will be liable to pay taxes for its business activities like any other nonprofit organization, thereby adding a fixed sum to the national budget for national projects.

The JNF's Zionist activities for public purposes will remain tax-free and it will have sufficient funds to continue its important activities in the periphery, in the settlement enterprise and in the agricultural industry.

MK Smotrich said that "this arrangement reflects responsibility both for the state budget and for the continuation of the JNF's important Zionist activity. We insisted here on the essence and I am pleased that the coalition chairman and the Finance Ministry understood this.”

"I would like to thank Minister Bennett for his full support, the chairman of the coalition, the chairman of the Finance Committee, the Minister of Finance and all the members of the Finance Committee for hours of discussions, arguments and finally good-natured understandings. We will continue to work to advance Zionism and preserve national institutions," he added.

The JNF said in response that "JNF invests billions of shekels every year in improving the lives of Israeli citizens by investing in the periphery, in education, housing, infrastructure, the environment, and in strengthening the connection between the State of Israel and world Jewry.”

"We regret the fact that the Israeli government chooses to conduct itself in a destructive and violent manner against a Zionist organization whose entire essence is to assist the State of Israel and Israeli citizens, and blatantly violates the agreement signed two years ago, in which the JNF transferred 2.2 billion shekels to the state treasury.”

"The JNF Board of Directors will convene in the coming days to discuss the implications of the decisions of the government and the Knesset and examine the options available to it,” said the organization.

"Any harm to the JNF, the executive arm of the Jewish people in the land of Israel for the past 115 years, is a fatal blow to important social and infrastructure projects in communities throughout the country and to many Zionist organizations supported by it. Thus, the decision reached today by the committee deals another serious blow to the citizens of Israel in general and to those in the periphery, both the social and the geographic one, in particular,” the statement concluded.