A controversial bill that allows for a 35 percent tax exemption for pro-settlement donations passed its first hurdle on Sunday and now heads to the Knesset.

The Ministerial Committee on Legislation gave preliminary approval to a bill that allows for tax exempt status to be applied to donations for West Bank settlement activity.

Israel has promised the international community it would not provide special incentives for West Bank settlement activity.

Hagit Ofran of Peace Now charged the bill is a back-handed way of offering incentives for West Bank settlement development and activity.

Coalition chairman Ze’ev Elkin (Likud), who proposed the bill along with MK Tzion Pinyan (Likud) has denied the charge.

The bill amends the list of nonprofits whose donors can receive the exemption by including groups and institutions that “encourage settlement,” he said.

Elkin noted the language in the bill is broad and does not specify any specific region of the country.

He added that in proposing the bill, he had wanted to help Jewish development in the Negev and the Galilee.

It could also be applied to Beduin villages, he said.

Elkin said he is pleased the government decided to encourage such activity in the Negev and Galilee, and recognizes that it is as important as cultural or religious organizations.

“This will put an end to the absurd situation in which the Islamic Movement gets tax benefits for building mosques, but non-profit organizations like Ayalim and Or [that encourage building towns in the Negev and Galilee] remained deprived,” the coalition chairman said.

But the words “Negev and Galilee” are not mentioned in the bill or its explanatory section.

Instead the bill’s explanatory section speaks of encouraging “Zionist settlement.”

The bill now moves to the Knesset where it must undergo a preliminary reading, likely to take place Wednesday.

It then must pass three plenum votes, as well as committee discussions, before becoming law.

Separately, the Ministerial Legislation Committee rejected on Sunday a bill proposed by MK Ya’acov Katz (National Union) that would prohibit the nighttime destruction of illegal settler homes.

Katz is expected to ask the plenum to vote on the matter Wednesday as a private member’s bill.

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