Israeli treasury looks to scrap Palestinian day workers’ tax breaks

Palestinians working in Israel will see thousands of shekels reduced annually from their barely sufficient salary, as per an amendment proposed by Finance Minister Moshe Kahlon. The arguments he put forth are hair-raisingly infuriating.

By Ala Khatib

The Palestinians are expected to finance the checkpoints - a system that makes their lives a living hell. (
The Palestinians are expected to finance the checkpoints – a system that makes their lives a living hell. (

Every now and again the Israeli government declares that it intends to ease restrictions on Palestinian employment in Israel – from improving the workflow at West Bank checkpoints to clamping down on the bribes they need to pay to get a permit (up to a third of their monthly salary, in some cases).

Earlier this year, outgoing Defense Minister Moshe Yaalon said that he and Finance Minister Moshe Kahlon had completed a plan “to increase the number of Palestinian laborers entering Israel, while improving conditions at the checkpoints and ensuring standards of customer service.” They say it would cost NIS 300 million – but nobody knows who would foot the bill.

Last week I participated in a discussion organized by the Knesset’s Finance Committee, following Kahlon’s proposal to cancel tax breaks accorded to Palestinian laborers. In other words, he wants to increase the tax burden on them.

“Why not? Palestinians who have jobs in Israel live in paradise,” one Treasury official told me – opting to compare them to their brethren in the Palestinian Authority, of course.

These patronizing remarks can also be heard from Israeli employers of Thai, Filipino or African workers, who feel that they’ve done them a favor merely by virtue of offering them employment opportunities outside their country of origin.

However, not only foreign workers bear the brunt. The circle of exploitation is constantly expanding, with Israeli security guards and cleaners seeing their labor rights and employment stability constantly eroded.

These workers are often blamed by their employers and the government for their precariousness. They are “parasites,” “ingrates” and “lazy.” This is how a culture of masters and slaves is created and legitimized.

Minister Kahlon of La Mancha

Answering to a Finance Committee query, the finance minister said that the average salary of a Palestinian working in Israel is two and a half times higher than that of a Palestinian working in the Palestinian territories. He therefore proposed an amendment to the Income Tax Provision that would almost halve the tax breaks accorded to Palestinians working in Israel. In effect, it would mean slashing NIS 3000 per annum from each salary, that in the better cases stands just above the minimum wage.

This is what an average Palestinian worker does with the NIS 5,000 salary he earns in Israel: 1,500 are paid as brokerage fee (namely, bribery) to receive a permit, plus another 500 cover travel expenses. The worker ends up with a net salary of NIS 3,000 for an eight-hour day (effectively 16 hours, if you factor in the many long hours spent queuing at the checkpoints), six days a week.

And now Mr Kahlon wants to snatch another few thousand shekels a year from them.

Worse still, he claimed that the sum will be written off by tax returns to the Palestinian Authority (according the 1994 Paris Treaty, 75 percent of these taxes are being funneled back to the PA) and that it would help the Palestinian treasury balance its books. You heard him right: He wants the Palestinian Authority will tackle its debt on the back of these downtrodden employees.

He also claimed that he wished to put their tax situation on a par with Palestinians who work in West Bank settlements, where they enjoy fewer breaks. But if equality is so dear to him, why not do the opposite, and improve the situation of Palestinians working in settlements?

Furthermore, he claimed that the funds added to the state’s coffers will be used to upgrade the checkpoints. Again, you heard him right: He wants the Palestinians to finance the operation of a system that humiliates them and makes their lives a living hell as they make their way to scrape a living in Israel.

A culture of exploitation

There are currently some 50,000 Palestinians holding an Israeli work permit. There are another 25,000 working in settlements and 50,000 working in Israel without permits. In addition, there are almost 100,000 migrant workers from East Asia and Eastern Europe, as well as tens of thousands of asylum seekers contributing to the Israeli economy. Why are they being dismissed and humiliated by the Israeli government and employers? The unbearable lightness with which a culture of exploitation is taking hold in Israel is frightening.

Israelis must understand that they’re not immune to it, and that it slowly permeates into Israeli society, undermining its cohesion as a society. I’m not sure the current government would care enough about that to give it a second thought, but the Worker’s Helpline and other civil society organizations will put up a struggle.

Ala Khatib is the executive director of Kav La’Oved — Worker’s Hotline. This article was first published in Hebrew on Local Call. Read it here.