Jerusalem Municipality has begun collecting monies owed from arnona annual property tax, monies the city neglected to collect in recent years.

Until now, the state has prevented the municipality from collecting property taxes on the grounds that the state has an agreement with the United Nations and the churches. However, a new legal opinion states that the municipality must act to collect these debts, since these assets are not considered ‘houses of worship’ and are not entitled to an exemption from municipal taxes

Barkat: “We will no longer agree that the residents of Jerusalem will pay for these huge amounts, and the state must deal with the ramifications of its decisions.” We intend to take collection and administrative and legal enforcement.

Two weeks ago, the Jerusalem Municipality informed the Ministries of Finance, Interior, Foreign Affairs and the Prime Minister’s Office that it had begun to collect property tax debts in excess of NIS 650 million from some 887 properties throughout the city belonging to churches in Jerusalem and to UN institutions. It should be noted that these are not houses of worship, which are exempt from the municipal property tax law, but rather are used for various activities that are not prayers and some are even commercial activities.

Last week, the municipality-imposed foreclosures on several bank accounts belonging to churches due to non-payment of arnona: the Anglican Church – 7,214,228.42 shekels, the Armenian Church – 2,011,996 shekels, the Greek Church – 570,946.88, the Catholic Church – NIS 11,981,103.02 and other foreclosures.

So far, the state has demanded that the municipality collect these debts, in light of previous agreements with the churches. However, the municipality now has a legal opinion by Prof. Gavriel Halevi, an expert on international law who examined in depth the various legal aspects of the duties of the churches and the UN vis-à-vis the Jerusalem Municipality, and unequivocally stated that there is no basis for the state’s position and that the agreements between the state and the churches are not valid with respect to the Jerusalem Municipality and that the municipality is obligated by law to act to collect the debts.

Jerusalem Mayor Nir Barkat said that “we will no longer agree that the residents of Jerusalem pay for these huge sums, and the state must deal with the consequences of its decisions, or the state will compensate us and return this money for the development of the city, or we will collect it as required by law; administrative and legal enforcement, and if necessary we will not hesitate to appeal to the High Court of Justice.”

“The state played at the expense of the public-municipal fund here, at the expense of the residents of Jerusalem and illegally released the churches and the UN from paying municipal taxes in parts that are not prayer without any legal basis. The financial damage caused to Jerusalem over the years following the state’s position is close to NIS 1 billion. It is inconceivable that the residents of Jerusalem will have to finance municipal services for garbage collection, lighting, gardening and paving roads, and will prevent the municipality from collecting huge sums that could have helped significantly develop the city and improve services for the residents.”

The Municipality adds that “the exemption from paying property taxes from business and other properties owned and used by the churches is discriminatory and will entail additional claims for exemptions on the grounds of discrimination and inequality, which will increase the exposure and the risk of greater economic damage to the municipal coffers.” If the state does not allow us to collect the sums for Jerusalem residents, We will not hesitate to appeal to the High Court of Justice. Alternatively, if the state is interested in the current situation, we demand that the state give us full compensation for these sums. Either way, we will no longer agree that the residents of Jerusalem will pay for this amount.”

It should be recalled that the Jerusalem Municipality is currently engaged in a struggle with the Ministry of Finance in order to increase the capital grant in order to reduce the gap between Jerusalem and other cities to give each child and resident of Jerusalem the same conditions as other cities in Israel. The Ministry of Finance has imposed a NIS 700 million tax on Jerusalem every year, without any indemnity, and the fact that the investment in a resident in Jerusalem is 30% lower than the average investment in other cities. To improve education, culture, welfare and the appearance of the city.

(YWN – Israel Desk, Jerusalem)