The High Court of Justice on Wednesday ruled that an amendment to the Income Tax Act which bestows tax benefits to several communities, not one of which is Arab, is discriminatory and therefore unconstitutional. The decision came after petitions against Amendment 146 were submitted by the human rights groups ACRI and Adalah in 2005.
The court's decision gave the State the opportunity to amend the act to eliminate discriminatory elements in the context of its 2011-2012 fiscal legislation. The court gave the State two months to initiate the process and ordered it to report its progress by November 30.
The amendment originally bestowed tax exemptions to Israeli communities located on the border with the Gaza Strip, but the list quickly expanded to include additional communities . The petitioners claimed that the provision of significant tax rebates to communities without clear criteria is a violation of the right to equality, and pointed to the fact that not one of the communities enjoying the benefits is Arab.