Israel Matzav

Israel's Acting Prime Minister Demands Taxes on Donated Items for Israel's Needy

Acting Prime Minister and Finance Minister Ehud Olmert demanded last month that taxes be paid on charity items recently donated by American Jews to help Israel’s needy population prepare for winter.

Olmert's act has raised a storm of angry criticism from Israeli and U.S. Jewish leaders and has also created an unusually tense diplomatic climate sparking claims that trade treaties between Israel and America have been breached.

According to a report in the L.A. Times, Olmert made the decision to enforce an old, outdated law demanding a 28.5% tax and an additional airfare tax on U.S. charitable donations to Israel’s poor. The donations which include medical supplies, clothing and toys are the result of a charity drive in Jewish communities across the U.S. aimed at delivering the contributions to Israel in time for the holiday of Hanukkah. While Olmert's staff refused to grant any reduction in taxes to allow the release of the charity items, Olmert himself took part in a press interview at a Tel Aviv soup kitchen, in an apparent move to publicize his concern for Israel's poor and needy.

A spokesperson at Olmert's office in the Ministry of Finance claimed the decision was made to protect Israel's second hand garment industry; stating, “The law is explicit and has been in effect for decades. It is designed to protect the Israeli second hand garment industry. If American donors want to assist Israel’s poor, they should send money and have clothing purchased in Israel for donations. The Ministry has looked into the matter at the very highest level of the Office of the Minister himself. The law to tax charitable donations is explicit, and no reduction of any kind can be considered. The American donors should have considered this consequence prior to engaging in so ambitious an undertaking.”

Israel Textile Union Chairman, Ramsi Gabai denied any connection between the taxation on charity items and the defense of the Israeli garment industry. “There has not even been a second hand garment industry in Israel for thirty years. It is an absurdity to suggest that taxing American charity in any way defends the Israeli garment industry, or that such protection is at all desired by the Israeli textile industry. There is a Free Trade Agreement with the United States on all garments, which certainly covers charity if it covers items sold for profit. We ourselves at the Textile Union have a very large and successful program for the member firms to donate excess clothing inventory to charity. Are we to be taxed on our charity to the poor and needy next,“ asked Gabai.

posted by Carl in Jerusalem @ 12:44 PM