Sari Bashi, special advisor to HRW, a wrote this article in The New Arab that HRW republished on its own site:
In an October 27 ruling, the Supreme Court denied tax-exempt status to an Israeli-registered group running a school in the West Bank because the school educates Palestinian, not Israeli, children. The precedent-setting decision imposes financial burdens on civil society groups providing services to Palestinians, including groups that step in to fulfill responsibilities that the Israeli government, the occupying power in the West Bank and Gaza, has flouted.The court's ruling means that Israeli-registered groups operating in the West Bank will get tax breaks if they provide services to Jewish Israelis living in unlawful settlements, but not if they provide services to Palestinians living under military occupation in the same territory.These are the facts that arise from the court ruling: For the past three decades, the Society of Islamic Sciences and Cultural Committee has run schools in the Israeli-occupied West Bank, including in East Jerusalem. The Society submits regular reports to the Israeli nonprofit registrar. In 2004, as Israeli authorities built a barrier that cuts East Jerusalem off from the rest of the West Bank, the organization closed its Jerusalem schools and maintained just one school, in Bir Nabala, a West Bank Palestinian town inside an enclave surrounded by walls and fences.The separation barrier severs Bir Nabala from East Jerusalem and requires residents to access the rest of the West Bank through gates in the barrier and tunnels dug underneath it. Major roads in Bir Nabala, formerly commercial arteries, now reach a dead-end in an eight-meter-high concrete wall. After closing its Jerusalem properties, the Society rented them out to another educational organization, for a contracted annual sum of about US$600,000.Section 9(2) of the Israeli Income Tax Ordinance exempts nonprofit organizations from income tax if they perform a "public purpose," such as education. The ordinance does not specify a geographical scope for those services, and organizations serving Jewish residents of unlawful Israeli settlements in the West Bank receive Israeli income tax and other tax benefits.Israeli Supreme Court Justices Isaac Amit, David Mintz, and Alex Stein ruled unanimously that the Society must pay tax on its rental income because running a school for Palestinian children in the West Bank is not a "public purpose" that the Israeli government will indirectly subsidize through the tax exemption.Although the international law of occupation and international human rights law obligate Israel to ensure that Palestinian children in the West Bank are able to get quality education, and although the Palestinian Authority has no jurisdiction in Area C, where the school is located, the court found that educational services in Bir Nabala have no "link" to Israel for purposes of the tax law.
The court ruling itself explains its reasons, and of course HRW downplays or ignores them. Here, the ruling summarizes the finding from the District Court that it upheld.
On 30.10.2020 the District Court dismissed the appeal. The court held that a "public institution", as defined in the ordinance, is an existing member of society and acts for a public purpose, and that the wording of the ordinance makes no explicit reference to the connection between public activity and the State of Israel and the public in Israel. Therefore, the court moved to examine the purpose of section 9 (2) of the Ordinance. The court noted that the recognition of a body as a public institution for the purposes of section 9 (2) of the Ordinance is the same as an expense distributed from the state coffers and it constitutes indirect financing of the activities of that institution by the state. Given the general nature of the definition in the Ordinance, there is a concern that without a restrictive interpretive policy the dam will be breached and state resources will be distributed without adequate control. The purpose of the legislation therefore requires a narrow interpretation of the term "public institution", so that it will also include a component of affiliation with Israel. In the absence of such an element, the range of cases to which the section will apply will be construed far beyond the original intention of the legislature. The extension of the range of cases to which section 9 (2) of the Ordinance also applies in cases where there is no connection to the State of Israel may harm the public coffers and in fact constitute a tax benefit for entities that promote purposes that do not contribute to the State of Israel and the Israeli public. The court noted that beyond the substantive consideration, there is also a systemic consideration leading to the said result, since the state does not have the ability to effectively monitor public institutions operating in areas beyond its control.
The Israeli tax code specifies that non-profits must serve a "public purpose." The court rulings were that since tax breaks indirectly subsidize the activities of the organizations, the interpretation of "public purpose" must be made restrictively or else the Israeli public could end up subsidizing activities around the world or even those that could be covers for terrorism.
The court ruling defines "public purpose" as being either inside Israel or serving Israeli citizens or residents. It makes clear that if the students at the school are Israeli residents (Arabs of East Jerusalem) then the school indeed would be tax exempt - but the organization brought no evidence of this.
This means that within parts of Jerusalem outside the Green Line, there are plenty of tax-exempt organizations that serve Arabs. It is proof that the policy is not "apartheid" but a reasonable distinction between citizens and non-citizens that every nation on the planet has.
The Beit Safafa Primary School B is outside the Green Line. It exclusively serves Arabs in Jerusalem whom HRW call "Palestinians." It is accredited by Israel's Ministry of Education. It has the full support of the State of Israel. It proves that there is no discrimination against Arabs.
HRW adds irrelevant facts like Israel is responsible to ensure that Arabs in Area C get an education under "occupation." But that has nothing to do with tax law. Israel is not closing or threatening the school.
HRW also claims that there are indeed some Jerusalem residents (not citizens) who moved to Bir Nabala and send their children to this school, but they did not want to say this publicly because then the families might be subject to losing their Israel residency status for leaving Jerusalem. Even if this is true, the court can only rule based on evidence, and for HRW to demand that the Israeli High Court ignore the facts brought before it is fairly ridiculous.
HRW terms this legal ruling to be "apartheid:"
The court decision is a binding precedent and a departure from previous practices. It places a financial burden on Israeli-registered groups that serve Palestinians living under Israeli occupation and is the latest example of Israel's highest court rubber-stamping discriminatory practices that contribute to the crimes against humanity of apartheid and persecution, under an overall policy to maintain the domination by Jewish Israelis over Palestinians, even in matters of education.
As with every single other charge by HRW, this is false and slanderous. Israeli law has been completely consistent that Arab citizens of Israel and Jewish citizens of Israel are treated equally, no matter which side of the Green Line they live in. It is not apartheid - it is saying that citizens and residents have rights that non-citizens do not. That is not apartheid by any definition.
Finally, HRW betrays its own hypocrisy.
Israel has the right to define its criteria for non-profit tax status, as does every other country. The US has its own more expansive definition that says that educational and cultural institutions can be tax exempt for activities worldwide. But Human Rights Watch has demanded that the US restrict its own definitions of tax exemption to exclude non-profits that pay for services for Jews who live in Judea and Samaria!
While HRW claims that legal distinctions between citizens and non-citizens in tax laws are apartheid, it also demands a policy of excluding Jews - and only Jews - from the US definition of non-profit.
There is no apartheid in Israel. But there sure is antisemitism in Human Rights Watch.
One final note: The original article was, as noted, published in The New Arab, a virulently anti-Israel publication that HRW has no problem promoting. Here is its illustration for the article:
It is two kilometers west from the Green Line. If it is in occupied territory, then all of Israel is "occupied."
Meaning that HRW promotes the position that Israel altogether is illegitimate.
