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High Court to Bedouin Municipalities: Collect Taxes or your Budgets Will Be Docked

Tarabin

The Bedouin Village of Tarabin, in the Al Kasum Municipality

As a result of a lawsuit filed by Regavim against Bedouin municipalities that have never collected local residential or commercial taxes (arnona), the High Court of Justice issued a stern warning: “If taxes are not collected by August, a commensurate sum will be deducted from the budget paid by the State to these municipalities.”

The High Court of Justice has finally taken off the kid gloves: The  Bedouin municipalities Neveh Midbar and Al Kasum, which have never attempted to collect municipal taxes (arnona) on residential or commercial properties in their jurisdiction, have been issued a stern warning by the High Court: Either begin collection of taxes by August, or the annual budgetary support you receive from the State of Israel will be docked in the precise amount that should have been collected.

As long ago as 2011, the State Comptroller determined that despite the very large sums of money transferred to these local authorities by the State, since their establishment in 2002 they have consistently reported budgetary deficits in the millions, year after year, yet they take no discernable steps to generate income, as do all other municipalities in Israel and around the world.

Regavim petitioned the High Court in 2014, and the Court instructed these municipalities to begin collecting arnona. Despite this very clear directive, the municipalities failed to comply, claiming that in their opinion “it was not yet an opportune time to assess residential properties.”

In 2017, the Ministry of Interior testified before the High Court that it had instructed the municipalities to begin the process of tax collection by the end of that year. In order to map and register the properties in these townships, each municipality was given a special budget of NIS 1.5 million earmarked specifically for surveying – but apparently, even this wasn’t enough to oblige them to meet their obligations.

In the first hearing of Regavim’s most recent lawsuit on the matter, the municipalities informed the Court that the company hired to survey and register properties has completed measurements of only 250 properties thus far, in only 3 of the 11 settlements included in these municipalities –  but even these properties are not fully registered, because the surveyors had little success matching the properties to the identities of their owners. “There is very strong resistance on the part of the residents, so the representatives of the company (M.G.R. Ltd.) who visited the villages of Drijat and Umm Batin did an about-face and left emptyhanded.” The municipalities claimed that surveying all the settlements will take a few more months and requested an extension to complete the registration process.

In the course of the hearing, Justices Melcer, Barak-Erez and Shoham stipulated that by this coming August the municipalities must submit an update, informing the Court whether they had actually collected arnona from businesses that have already been surveyed and assessed, particularly businesses whose ownership  is clear.

“More concrete steps must be taken, and we must ascertain that they comply. We will continue to monitor and to demand answers,” said Justice Shoham. Deputy Chief Justice Melcer warned that if the situation remains unchanged by August, the Court may issue a “creative summary judgement” against the municipalities. “Creative solutions are available. You receive money from the State budget. Every asset that has been assessed but for which no taxes have been collected will be subtracted from the budget you receive from the government. Brace yourselves for August if the situation does not change.”

Regavim applauds this decision. “The fact that for over 15 years the residents of these municipalities have not paid arnona speaks for itself. The municipalities occasionally release non-committal statements that the process of tax collection will begin, but time and time again, they have failed to uphold the law or comply with the High Court’s explicit instructions. The Court has also become fed up with this endless saga of foot-dragging and disrespect, and we anticipate that if this most recent extension is not used to comply with the Court’s instructions, we will be awarded a final judgement that will put an end to the ongoing chaos.”