Following a recent dispute with the Israeli government that threatened to remove Keren Kayemeth LeIsrael Jewish National Fund’s (KKL-JNF) tax-exempt status if the organization did not pay the government about NIS2 billion ($720 million) over the next two years, an agreement has been reached.
KKL-JNF will pay the state NIS1.8 billion for infrastructure projects over the next three years, allowing the organization to keep its tax-exempt status.
While KKL-JNF is not state run, the government appoints many of its officials and a public agency, the Israel Land Authority, manages and sells its land.
The compromise – reached late Monday by KKL-JNF director general Amnon Ben Ami and Yoav Horowitz, Prime Minister Benjamin Netanyahu’s chief of staff – comes after Netanyahu called an emergency government meeting earlier this month, during which he said that KKL-JNF receives billions of shekels from the sale of Israeli land and “it is very important that this money be channeled to the needs of the State of Israel.”
In response, KKL-JNF head Danny Atar tweeted that the organization “invests billions every year in strengthening the periphery, education and the environment. It’s a shame that you, Bibi, are fulfilling Zahalka’s dream of dismantling the JNF.”
Jamal Zahalka, a Knesset member from the Arab Joint List party, is among those who criticize JNF for selling land exclusively to Jews.
Atar agreed last month to pay NIS2 billion in two payments over two years, but the KKL-JNF board of directors rejected the deal.
That led government ministers to advance legislation earlier this month to force KKL-JNF to transfer 80 per cent of its revenue to the Finance Ministry every year, or lose its tax-exempt status.
After the Knesset finance committee lowered the legislation’s demands to 65 per cent of the organization’s revenue, its board of directors approved the deal, contingent on the government not passing a bill that would make KKL-JNF pay taxes.
Lance Davis, CEO of JNF Canada, said he’s happy that KKL-JNF and the Israeli government struck a compromise, but explained that because KKL-JNF and JNF Canada are separate organizations, it’ll be business as usual for the Canadian entity, regardless of the agreement.
“As a sister organization, they work with us to develop projects in Israel. We are able to flow money that we raise in Canada through KKL, through which we are able to fund projects in Israel,” Davis explained.
“We’re currently building a shelter for abused women and their families in Rishon Lezion, we’re building a huge community park in Sderot. These projects aren’t connected to, or related to, the deal that they just sorted out.… The funds we raise in Canada ensure these projects are built and we take responsibility and control of these dollars, so we can tell our donor base with certainty and confidence that these projects are getting done.”
Davis said that although KKL-JNF and the Israeli government have been in conflict, he’s encouraged that they were able to reach a deal.
“We always applaud organizations for finding ways to make things work and I would give the leadership of the state and leadership of KKL a yasher koach for finding a way to make it work,” he said.
“We are quite pleased and happy that an agreement was hammered out that seems to be suitable to both parties and I think that’s good for the Jewish People.”
Moshe Gafni, head of the Knesset finance committee, announced that he intended to ignore the compromise and continue legislating a bill that would make the organization pay more money to the state.
“There is no reason in the world why KKL-JNF will not pay taxes like everyone else, and we will make it happen by law,” Gafni warned.
Davis said he has no idea what will happen when the deal expires in three years, “but I hope that cooler heads will continue to prevail and that three years from now, when it’s time to revisit it, they’ll come up with a satisfactory arrangement going forward.”
With files from JTA