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Israeli Parliament Approves Tax Incentives for West Bank Settlements

(MENAFN) Israel’s parliament has passed legislation providing tax benefits to residents of dozens of settlements in the occupied West Bank, following a final vote held on Thursday.

According to a statement from the Knesset, the measure grants tax exemptions to settlements located in an area designated by Israeli authorities as the “eastern confrontation line zone.” The bill received final approval after lawmakers voted 32 in favor and 23 against.

The legislation was introduced by members of the governing coalition, including Zvi Sukkot of the Religious Zionism party and Limor Son Har-Melech of the Jewish Power party, along with several other parliamentarians.

Under the new law, eligible residents will be able to receive tax relief throughout the tax year. Individuals who qualify for multiple tax benefits will also have the option to choose the exemption most advantageous to them.

The measure is scheduled to take effect in January 2027 and remain valid until the end of that year. It further allows Israel’s finance minister, subject to approval by the Knesset Finance Committee, to extend the program for additional periods of up to two years at a time.

According to reports, the legislation was initially drafted to cover all settlements in the occupied West Bank. However, the proposal was later scaled back due to concerns over its financial cost and objections raised during the review process. The final version reportedly applies to 58 settlements.

Reports citing the Israeli monitoring organization Peace Now stated that the revised legislation primarily covers settlements where support for the Religious Zionism party is particularly strong. The group also said the law would grant substantial tax advantages to residents of the affected communities.

The issue of Israeli settlements remains highly controversial internationally. Much of the international community regards settlements built in occupied Palestinian territories as illegal under international law and considers their expansion a major challenge to efforts aimed at achieving a two-state solution.

Since returning to office in late 2022, the government led by Israeli Prime Minister Benjamin Netanyahu has supported the continued growth of settlement activity in the occupied territories. According to estimates cited by reports, more than 750,000 Israeli settlers currently live in the occupied West Bank, including East Jerusalem.

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