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Israel approves tax incentives for illegal settlements in occupied West Bank

The Israeli Knesset has given final approval to legislation granting tax exemptions to dozens of illegal settlements in the occupied West Bank.

In a statement on Thursday, the Knesset said lawmakers approved the bill on its final reading, granting tax benefits to illegal settlements located in what it called the “eastern confrontation line zone.”

The legislation was sponsored by Knesset members Zvi Sukkot, from the Religious Zionism party led by Finance Minister Bezalel Smotrich, and Limor Son Har-Melech, from the far-right Jewish Power party led by National Security Minister Itamar Ben-Gvir, along with other lawmakers.

The bill passed by 32-23 votes. Under the law, occupants will be entitled to tax exemptions throughout the tax year and may choose among available tax benefits if they qualify for more than one exemption.

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Benefits for illegal settlers

The legislation is set to take effect in January 2027 and remain in force through December 31, 2027. It also authorises the finance minister, with approval from the Knesset Finance Committee, to extend its validity for additional periods of up to two years each.