Knesset Committee to Discuss Bill Imposing 80% Tax on Foreign Funding of NGOs Tomorrow (Monday 5 May 2025)

Today, 4 May 2025, Adalah, on behalf of nine Palestinian NGOs in Israel, sent a letter to MK Simcha Rothman, Chairman of the Knesset’s Constitution, Law, and Justice Committee, and relevant legal advisors, urging them to halt the advancement of the “Associations Bill (Amendment—Donation from Foreign State Entity), 2024" commonly known as the “NGO Taxation Law.” The bill is set for its first discussion tomorrow, 5 May 2025, at the Knesset’s Committee, after receiving the endorsement of the Ministerial Committee on Legislation.

Adalah Attorney Salam Irsheid sent the letter on behalf of Adalah, Women Against Violence, Tashreen, Baladna – The Association for Arab Youth and Young People, The Arab Culture Association, The Arab Center for Alternative Planning, The Follow-up Committee for Arab Education, Mada Al-Carmel – The Arab Center for Social and Applied Research, The Nazareth Nurseries Institute, and Citizens for the Environment.

    CLICK HERE to read Adalah’s letter 

    CLICK HERE to read the bill [in Hebrew] 

CLICK HERE for an unofficial English translation 

The bill, which passed preliminary reading in February 2025 and is now in preparation for its first reading, stipulates that any donation received by an NGO from a foreign state entity will be subject to an 80% tax. The bill stipulates exceptions, including organizations that are state-funded or receive an exemption from the Minister of Finance. "Additionally, it notes that “a court shall not entertain a petition submitted by an organization whose primary funding comes from a foreign state entity, unless it is state-funded”.

In their letter, the organizations argue that the bill is a clear attempt to undermine and potentially dismantle civil society organizations, directly infringing upon the fundamental rights of freedom of association and freedom of expression.

The letter further notes that the bill establishes a dangerous distinction: organizations that receive state funding or exemptions will be allowed to operate freely, while those that do not receive such funding or exemption will  face the crippling 80% tax and/or even denial of access to the courts. This creates a politically driven system that could determine whether an organization survives, based solely on its alignment with government interests. 

The bill is tailored specifically to target and de-fund human rights organizations. The bill’s primary sponsor, a member of the ruling Likud party, openly stated: “These are not human rights organizations, but de-legitimization organizations,” exposing the bill’s true intent: targeting human rights organizations that challenge Israeli policies and practices, mostly against Palestinians in the Occupied Palestinian Territory (OPT) and in Israel.

The organizations argue that the bill would lead to extreme violations of fundamental rights, severely restricting the ability of civil society organizations to operate, and particularly harming marginalized communities in Israel and the occupied Palestinian territory.

Read: Open Letter: Stop the Israeli Government's Systematic Assault on Civil Society, 3 April 2025