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LEGAL ADVOCACY

Arnona tax petition against the Jerusalem Municipality

The Israeli Supreme Court held a session on Thursday, 5 April 2001, to discuss the petition submitted in October 2000 by JCSER through Advocate Avigdor Feldman on behalf of merchants in East Jerusalem. Petitioners requested the Municipality to refrain from imposing a unified Arnona tax and to take into consideration the business location and the economic and social differences between East & West Jerusalem. Income levels in West are much higher than in East. Palestinian merchants, for example, are currently going through a very bad economic situation as a result of the closures imposed on Jerusalem since 1993.

The petition clarified that there are social, economic and commercial differences between West & East Jerusalem. The majority of residents in East Jerusalem earn the minimum level of wages and the unemployment rate is high. Despite this, the Arnona tax imposed in East & West Jerusalem is similar. Although the tax is unified in East and West Jerusalem, the Municipality differentiates between East & West concerning the infrastructure services provided and budgets allocated.

Petitioners described the policy of a unified Arnona tax as a ‘discriminatory and abusive’ measure against the interests of Arab citizens in East Jerusalem. Therefore, the Supreme Court is requested to accept the petition and to issue an order against the defendants and a decision to collect Arnona tax according to income level.

The session was held in the presence of a judicial committee, consisting of three judges to study the petition submitted by JCSER on behalf of Arab merchants in East Jerusalem through its advocate, Avigdor Feldman. The petition was submitted against the Jerusalem Municipality and its Municipal Council.

During the session, the Supreme Court issued a 45-day preventive order, according to which the Municipality will refrain from issuing new Arnona tax invoices to the Arab merchants in East Jerusalem or taking any measures against them. This preventive order was issued to give the judicial committee time to reply to the case. The Supreme Court also demanded that the Israeli Ministry of the Interior would join the case.

JCSER submitted an economic study, showing that the amount of taxes imposed on businesses in East Jerusalem is not realistic when looking at the current situation. The study clarified that there are differences between East and West Jerusalem in terms of income levels and standards of living, stressing the fact that the Arnona tax must be reduced to its minimum level in East Jerusalem.

The study showed that over 235 shops are closed inside the Old City of Jerusalem, constituting 25% of the total number of shops, because of the Arnona tax policy. There are also hundreds of merchants owing the municipality hundreds of thousands of shekels, forcing them to reach temporary solutions with the municipality, to discover afterwards that these amounts have accumulated.

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