Knesset approves tax benefits for West Bank settlements amid opposition criticism

The Knesset approved legislation late Wednesday night that will grant tax benefits to numerous settlements in the West Bank. The bill passed with 32 lawmakers in favor and 23 opposed, with the Tax Authority estimating the budget cost at NIS 130 million, noting an existing funding source.

The passage of the bill became controversial after benefits initially intended for northern border communities were removed. This decision drew criticism from opposition lawmakers, who argued that the government failed to prioritize aid for the North, an area facing continued threats from Hezbollah attacks. Some opposition members suggested the northern community benefits were deliberately included to increase the bill's chances of passing.

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an injustice toward tens of thousands of residents of Judea and Samaria living under a continuous security threat has been corrected.

The legislation, sponsored by MK Zvi Sukkot of the right-wing Religious Zionist Party, establishes tax benefits for communities in a designated “eastern conflict-line area” in the West Bank. To qualify, communities must be located more than two kilometers east of a security barrier. Additional conditions include settlements where student transportation requires bulletproof vehicles, or those ranked six or lower on Israel’s Peripherality Index or Socio-Economic Index. The settlement's establishment must also be approved by law.

Finance Minister Bezalel Smotrich welcomed the legislation, stating that an injustice to tens of thousands of residents of Judea and Samaria living under continuous security threat has been corrected. He argued the amendment provides appropriate recognition of life in threatened communities and reflects equal treatment for residents on the front line of defense. The law takes effect in January 2026 and remains in force until December 31, 2027, with potential extensions by the finance minister.

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The amendment to the Income Tax Ordinance provides appropriate recognition of the reality of life in threatened communities and reflects equal treatment for residents who are on the front line of defending the Sta