Israeli-Arab municipalities collect 70% less property taxes

Researcher attributes difference to tendency in Jewish areas to have lots of industry, businesses whereas Arab areas have few such zones.

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March 23, 2014 03:24
2 minute read.
Ghaida Rinawie-Zoabi

Ghaida Rinawie-Zoabi.. (photo credit: INJAZ)

 
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A conference last week in Nazareth presented research on the issue of financial resources and budget allocation for Arab municipalities in Israel, showing that Arab areas collect 70 percent less property taxes than Jewish ones.

Injaz – Center for Professional Arab Local Governance and Sikkuy – Association for the Advancement of Civil Equality hosted the conference on Tuesday to present their research findings.

More than 260 attended the event, including representatives from different ministries, academics, non-governmental organizations and businesses along with mayors and senior management from Arab municipalities.

The director of Injaz, Ghaida Rinawie-Zoabi, told The Jerusalem Post that one of the main findings of the research was that there is a 70% gap in tax collection between Arab and Jewish municipalities.

Even if all Arab mayors collected 100% of property taxes (arnona) from private homes, it would not make a significant difference in the overall sum collected.

She attributes the difference to the fact that Jewish areas tend to have lots of industry and businesses whereas Arab areas have few businesses or industrial zones.

There are two kinds of property taxes, which make up a major component of income for the municipalities: private homes and businesses.

Rinawie-Zoabi said that the Arab sector needs to work to collect 100% of taxes as Arabs need to take responsibility for their own towns. Asked what the average rate of property tax collection is in Arab municipalities, she said that it was between 40 to 45%.

Asked if the dynamics within Arab towns and the power of clans and families is an issue that could hinder reforms, she responded that tradition is very strong, “but things are changing.”


Injaz began working on this project two years ago and it seeks “to send a strong message to Arab mayors to take responsibility of their own towns and tax collection,” she said.

Collecting more taxes will bring more social solidarity to Arab towns, she added.

Separately, Israeli Arabs continue to come out against Finance Minister Yair Lapid’s proposal to cancel the 18% value-added tax on first home purchases for young couples who have served in the IDF or national service.

“This is a decision that discriminates against the Arab community,” where “most of its people don’t serve in army,” Suhad Bishara, director of the Land and Planning Rights Unit at the NGO Adalah – The Legal Center for Arab Minority Rights in Israel, told the Post Saturday night.

Bishara added that the proposal would not affect the Arab sector much because construction there is usually self-building and not done by contractors.

“My impression is that it will not pass, many people are against it, and an economist resigned a few days ago over it,” she said.

This law is “a direct hit against the Israeli Arab population,” said Balad MK Basel Ghattas.

Niv Elis contributed to this report.

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