Controversial Bill Aims to Penalize Foreign Donations to Organizations Promoting Democratic Values

In a move that could have significant consequences for civil society organizations, the Israeli government has advanced a bill to impose an 80% tax on donations from foreign political entities to non-governmental organizations (NGOs). The bill, sponsored by MK Ariel Kellner, passed the Ministerial Committee for Legislative Affairs and is set for a preliminary reading later this week, likely to be discussed in the Constitution Committee.

The bill's primary focus is taxing donations from foreign political entities, which, according to the proposal, include countries that support democratic values such as human rights, minority rights, and cooperation between Jews and Arabs. These are the same nations, including the United States, the European Union, and Australia, that frequently donate to NGOs supporting liberal democratic causes.

Targeting NGOs Promoting "Shared Values"

However, critics argue that this move is part of a broader ideological agenda to curb support for organizations promoting democratic values in Israel. Supporters of the bill view these NGOs as a threat to Israel's character, accusing them of supporting the "left" and undermining the state's identity. On the other hand, right-wing NGOs, which support settlements and the construction of the Temple Mount, are exempt from this proposed tax, as their donations largely come from private individuals or foundations rather than foreign governments.

Striking at the Heart of Democracy

The proposal effectively creates a division between the "Jewish" and "democratic" components of Israel's identity. Donations that strengthen Israel's Jewish character would remain tax-exempt, while those promoting democracy would face an 80% tax. Critics argue that this could severely impact the ability of human rights organizations to operate, as many depend on foreign funding to carry out their work.

Further, the bill includes a provision that would prevent NGOs primarily funded by foreign political entities from bringing cases to court, adding to concerns about restrictions on freedom of political expression and association. This measure follows a previous law requiring transparency regarding the funding sources of NGOs but takes the restrictions much further, potentially blocking access to legal recourse for organizations advocating for democratic reforms.

Opposition from  Civil Society

The bill has already faced opposition from key government agencies, including the Ministry of Justice, which argues that it would harm fundamental rights, including political expression and access to justice. The Ministry of Finance also expressed concern, citing the negative impact the tax could have on philanthropic donations intended for hospitals, universities, and other charitable causes in Israel.

Despite the backlash, proponents of the bill argue that it is necessary to protect Israel from foreign interference in its internal affairs. However, the law's broad and punitive nature has raised concerns that it could be used to stifle dissent and silence critical voices within civil society.

A Larger Agenda: Undermining Civil Society?

The bill is seen by many as part of a broader effort by the Israeli government to weaken civil society and silence critics of its policies. With the judicial system, media, and academia already under scrutiny, human rights organizations appear to be the next target. The government has already used the derogatory label of "left-wing" to discredit these organizations, framing them as enemies of the state for their stance on issues such as military actions and relations with Palestinians.

As the bill progresses through the legislative process, questions remain about how far the government is willing to go in curbing civil liberties. If passed, the law could set a dangerous precedent for the relationship between the state and organizations advocating for democratic principles in Israel.

A Divisive Debate: Future Implications

The future of the bill remains uncertain, with some speculating that it will be revised in a more moderate form before becoming law. However, if MK Simcha Rothman, a prominent proponent of the bill, continues to lead the charge, there are fears that the taxation could increase, further restricting NGOs' ability to operate.

This proposal also raises important questions about the nature of Israel’s relationship with the global community. As the government turns away from democratic values shared with countries like the United States, the consequences for Israel’s standing on the world stage may become more pronounced. With human rights organizations now in the crosshairs, it remains to be seen whether this bill is part of a larger effort to reshape Israel’s democracy in line with a more nationalist, exclusionary vision.