update deskIsrael at War

Israeli finance minister cancels UNRWA tax breaks

Following revelations of agency's Hamas ties, Bezalel Smotrich ordered its tax benefits be revoked.

Finance Minister Bezalel Smotrich at an Israel Defense and Security Forum conference in Ashkelon, Jan. 25, 2024. Credit: IDSF.
Finance Minister Bezalel Smotrich at an Israel Defense and Security Forum conference in Ashkelon, Jan. 25, 2024. Credit: IDSF.

Finance Minister Bezalel Smotrich ordered the annulment of tax benefits Israel grants UNRWA as a U.N. agency, it was announced on Thursday.

UNRWA, the United Nations Relief and Works Agency for Palestine Refugees, receives exemptions on customs duties and sales taxes on the import of various goods. It also receives exemptions on value-added tax (VAT) on imports and fuel-related taxes.

But given the recent reports of the U.N. aid agency’s involvement in Hamas activities, Smotrich decided to strip UNRWA of its benefits.

The decision is awaiting input from the Justice and Foreign ministries and the National Security Council. After a reply is received from the ministries, the order is expected to be finalized.

UNRWA has come under intense scrutiny in recent weeks following revelations that approximately 10% of its 12,000 Gaza workforce are linked to Hamas, with at least 12 staffers participating directly in the terrorist group’s Oct. 7 massacre.

The revelations have led more than a dozen countries, including the United States and Germany, UNRWA’s biggest donors, to suspend funding to the agency.

Prime Minister Benjamin Netanyahu discussed UNRWA during his meeting with visiting U.S. Secretary of State Antony Blinken on Wednesday.

Netanyahu said that “the process of replacing UNRWA should begin.”

Blinken replied, “At the moment, there is no choice but to continue UNRWA’s critical humanitarian duties in Gaza. We are working with other U.N. agencies on how they can fulfill these roles in the near term.”

It has been long documented that UNRWA’s school curricula are rife with antisemitism and anti-Israel hatred. The U.N. agency also has perpetuated the Palestinian refugee problem, granting the unique right to inherit refugee status, a right which exists nowhere else in the world, and has exploded Palestinian Arab “refugee” numbers.

Recognizing the problems with UNRWA, then-President Donald Trump ended U.S. funding to the agency in 2018.

The Biden administration restored the funding, and in July 2022 announced it had given more money to UNRWA than any other organization in the world. The United States gives UNRWA between $300 million and $400 million annually.

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