The Media Line: Israel Debates 80% Tax on Foreign-Funded NGOs in Move To Curb ‘External Influence’ 

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Israel Debates 80% Tax on Foreign-Funded NGOs in Move To Curb ‘External Influence’ 

By The Media Line Staff 

A parliamentary committee in Israel began deliberations Monday on a controversial bill that would impose an 80% tax on non-governmental organizations receiving most of their funding from foreign entities. The legislation, backed by members of the ruling coalition, aims to curb what proponents describe as “improper foreign interference” in Israeli domestic affairs. 

Under the proposed law, foreign-funded NGOs would also be barred from petitioning Israeli courts, including the Supreme Court — a move critics say strikes at the heart of democratic accountability. An exemption from the tax could be granted by the finance minister – currently far-right politician Bezalel Smotrich – while groups with annual revenues under 100,000 shekels ($27,668) or funded by the Israeli government would be exempt. 

The debate, held in the Knesset’s Constitution, Law and Justice Committee, quickly turned heated and broke along partisan lines. Lawmakers from the governing coalition defended the bill as a national security measure, while opposition members warned of its implications for democracy and civil society. 

“This law will preserve a Jewish state and a democratic regime, and will block improper foreign interference,” said lawmaker Ariel Kallner, the bill’s sponsor, from Prime Minister Benjamin Netanyahu’s right-wing Likud party. The bill must pass three readings in the Knesset to become law. Monday’s session was its first step toward a preliminary vote in the plenum.