Knesset advances first reading for tax benefits bills for Ashkelon, southern Israel, West Bank

The bills will now be brought to the Knesset’s committees for further discussion before being brought back to the plenum, where they will need to pass a second and third reading to become law.

The Knesset approved in a first reading on Wednesday a bill to expand areas that receive tax benefits to include Ashkelon and additional localities near the Gaza Strip.

In a separate vote, the plenum approved in a preliminary reading a bill proposal to grant tax benefits to communities in the West Bank that are classified between threat levels 2 and 5, according to a ranking set by the Defense Ministry.

If the West Bank tax proposal bill passes all three readings, West Bank communities will receive tax benefits similar to those granted to communities in broader areas of Israel.

Tax exemptions for Ashkelon and southern Israel

The bill proposing to expand tax benefits in Ashkelon and southern Israel was unanimously approved, with all 51 MKs in attendance at the plenum session voting in favor.

It will now be brought to the Knesset’s committees for further review before being brought back to the plenum, where it will need to pass a second and third reading to become law.

The proposal seeks to expand eligibility for tax benefits to include towns with up to 100,000 residents. It calls for establishing, for the tax years 2026 through 2029, a 7% earned-income tax credit for residents of cities in the designated areas near the Gaza Strip.

Finance Minister Bezalel Smotrich said, “The residents of Ashkelon are a living example of Zionism in action, people who continue to build, work, and raise families despite constant threats.”

“Their bravery, steadfastness, and faith in the path are a beacon for all Israeli citizens. Our duty as a state is not only to appreciate them in words but also to translate that appreciation into action, and tax benefits are one expression of that,” he continued.

Further, Smotrich said that the bill aligns with the government’s decision from about two months ago to allocate NIS 1.4 billion for the continued development and renewal of Ashkelon.

Reacting to this development, Ashkelon’s Mayor, Tomer Glam, said, “Today we took another step in our uncompromising fight for tax benefits for Ashkelon residents. It is rightful, it is deserved, and we will not rest until this reaches them directly.”

“We are looking forward to the next stage, and with God’s help, we will succeed in bringing tax benefits and justice to the heroic residents of Ashkelon,” he added.