According to the Jerusalem Tax Bureau, Palestinians employed by Israeli firms in the settlements of the West Bank are not entitled to tax refunds, in contrast to Israelis and Palestinians working inside Israel.
This discriminatory and unexplained announcement by the bureau recently induced the MAAN Workers Association, in cooperation with the Orient Accountancy Office in Jerusalem, to appeal to the head of the Tax Authority, Mr. Eran Yaakov. In a letter of August 5, MAAN Executive Director Assaf Adiv called on the Tax Authority to stop abusing Palestinians who work in Israeli settlements and allow them to file appeals for tax returns. MAAN and Orient made the appeal after it became clear that the Jerusalem bureau, which is supposed to handle these files, refuses to do so on various pretexts, including lack of staff and lack of expertise in the applicable Jordanian law.
Since 2018, the Orient Accountancy Office has filed dozens of tax refund applications for workers in the Mishor Adumim industrial zone. Despite promises, the review of these cases has been repeatedly delayed. Now it has become clear that there will be no answer, in clear violation of the law.
Thirty-eight of the neglected applications are by Zarfati Garage workers in Mishor Adumim, who received compensation for Zarfati’s past debts in 2017 thanks to a MAAN-initiated collective agreement. Thousands of shekels were deducted from their salaries at the time, as if the compensation was a wage raise. The Tax Authority refused to consider the fact that the workers had actually received back payments on previous years. At the time, the bureau officials promised that when the workers filed a request for refunds, they would be compensated. Now all these promises have evaporated and the final word is a simple NO!
The tax laws for Palestinians employed in the West Bank settlements are based on Jordanian law. They differ from the laws applicable to Israelis, as well as from laws concerning Palestinians working in Israel. Palestinians employed in the settlements are not entitled to an exemption for the first NIS 5000 of their wages , as are Israelis and Palestinians working in Israel. In practice, those who work in the settlements pay hundreds of shekels monthly even if earning minimum wage (NIS 5300 per month), whereas an Israeli earning that much pays no tax at all and is sometimes entitled to get money back in the form of a negative income tax.
As we noted in our letter to Mr. Eran Yaakov: If examination of the tax issue for Palestinian workers under Jordanian law is too complex for the Tax Authority, it would be better to apply Israeli law and thus make checking easier. This would accord with a ruling of Israel’s High Court, the so-called Kav Laoved – Givat Ze’ev decision from 2007, which stated that Israeli labor law should apply to Palestinians working in the settlements. In any case, the Tax Authority may not legally take taxes from them without allowing them to request a check on possible refunds as mandated by law.
A copy of our letter was forwarded to the State Comptroller as an example of the Tax Authority’s neglect and a breach of the Tax Authority’s legal obligations. This letter garnered an immediate response. The Comptroller’s office made some requests to ensure that MAAN had power-of-attorney from the workers to speak in their name. After being convinced that MAAN represents the workers, it approached the Tax Bureau in Jerusalem (copying MAAN in) and asked it to explain why it had not answered us.
The efforts of WAC-MAAN in this matter, in cooperation with Orient Accountancy, may yield results for tens of thousands whose right to refunds has so far been denied. Success in this case will potentially allow 30 thousand workers in the settlements to get their refunds for the first time.
MAAN continues to lead the struggle to secure the rights of Palestinian workers. Just as we fought against the Service Fees charged by the Histadrut for 50 years, and succeeded in getting them abolished, so too in the matter of the tax refunds, we are confident that we can make another gain. We have no illusion that this incremental progress will end the Occupation and Apartheid, but we believe it can create a culture of struggle and organization that will bring results, educating workers in a spirit of struggle and organizing and creating the ground for deeper and more fundamental changes in the future.
