The Israeli Parliament is debating a controversial bill that would impose an 80 per cent tax on foreign donations to civil society organisations primarily funded by ‘international political entities’. The proposed law would also bar these groups from petitioning Israeli courts. Its supporters claim the move will safeguard national sovereignty by limiting foreign interference in domestic affairs, with exemptions for state-funded groups and smaller organisations. Critics – including numerous civil society organisations (CSOs) and opposition parliamentarians – condemn it as a blatant attempt to silence critical voices, particularly those engaged in human rights monitoring and advocacy.

CIVICUS discusses the proposed legislation with a representative of a CSO based in Jerusalem who asked to remain anonymous for security reasons 

What’s the goal of the proposed bill and who would it affect most?

The bill, submitted by the far-right Minister of National Security and supported by other extremist parties, seeks to impose an 80 per cent tax on donations to CSOs registered in Israel when more than half of their funding comes from foreign sources. It has yet to pass three readings in parliament, but if enacted it would effectively paralyse many human rights organisations, as most of them rely heavily on international funding.

Supporters claim the bill aims to limit foreign influence and defend ‘state sovereignty’, but the targeting is deliberate. The affected groups are those that promote a two-state solution and defend peace and human rights. These organisations are already facing restrictions, including criminalisation under anti-terrorism laws, arrests, interrogations and travel bans. This law would add financial strangulation to the heavy restrictions weighing on civic space in Israel and the Occupied Territories.

How is civil society structured in Israel and Palestine?

CSOs have operated since before Israel’s establishment, but their numbers surged following the 1967 war between Israel and a coalition of Arab states, and particularly during the 1990s. Then, the peace process and creation of the Palestinian National Authority – the interim governing body for Gaza and the West Bank – resulted in international funding that supported groups working on environmental issues, governance and gender-based violence.

The registration system varies by location. In the West Bank, all organisations register with the Palestinian Authority. In Israel, groups register under the 2000 Associations Law. East Jerusalem presents particular complexity. Many organisations still operate under licences issued before the Israeli state, during the British Mandate or Jordanian rule. Others hold both Israeli and Palestinian registrations, as Israeli law requires registration to handle finances such as salaries and rent, while some have only single registration, limiting their functionality.

This patchwork system creates administrative complications, particularly in relation to the new legislation.

How would this law impact on human rights work?

The law would devastate organisations that document human rights violations, monitor democracy and promote peace across Israel and the Occupied Territories. They are already struggling after 7 October, and if their resources are cut by 80 per cent, the inevitable result will be office closures, mass redundancies and suspended services. Being labelled ‘foreign agents’ would also expose them to additional state sanctions.

We’re already witnessing escalating repression. A bookstore in East Jerusalem, for example, was recently raided without a legal warrant, its owners arrested for selling a book criticising the government. Sadly, this is becoming more common. Under the excuse of ‘security reasons’, civil society has become a target, even when there’s no real threat.

The Israeli authorities are weaponising legal interpretation to displace Palestinians and shut down community initiatives. Palestinian community, cultural and educational centres such as the Al-Bustan Society in Silwan, a religiously important neighbourhood near the Old City of Jerusalem, are being demolished to make way for Israeli construction projects.

The situation is particularly serious for children. Despite Israeli and international law prohibiting arrests of minors, children are being placed under house arrest with ankle monitors, denied education and legal protection. Their parents become unwilling enforcers, because if the children leave home, parents face jail time and heavy fines.

Any organisation exposing these human rights violations gets labelled an ‘enemy’. Even groups not primarily focused on human rights but critical of authorities face targeting as the government seeks to eliminate all dissenting voices. The shrinking space for dissent has already reached those calling for an end to the war in Gaza and the West Bank and those who support stopping the killing of civilians and allowing the entry of humanitarian and medical aid to civilians, as well as those advocating for a prisoner exchange. This includes grieving families demanding the return of Israeli hostages, many of whom have been attacked or arrested during peaceful protests.

Crucially, this repression isn’t limited to Palestinians: it targets anyone contradicting the government’s narrative. Both Israeli and Palestinian organisations now face threats, albeit for different reasons.

 

What other restrictions are being imposed?

All international organisations must now undergo a new registration process obviously designed to control activities that support Palestinian communities. Even major international bodies aren’t exempt: United Nations (UN) agencies have been directly targeted.

Authorities have ordered the UN Relief and Works Agency for Palestine Refugees, known as UNRWA, to shut down its East Jerusalem operations. This was followed by closures of UN-run medical centres and schools serving Palestinian refugees in the city.

Palestinian communities in refugee camps and around the Old City, many of whom depend on these institutions, have been directly impacted. UN-run schools have been raided, students removed and closure orders posted by Israeli authorities. These actions represent a significant escalation, targeting not only the UN but every international organisation present in the area.

Major humanitarian organisations such as Al-Quds Fund and Endowment and World Vision ‎ have been forced to cease operations in Jerusalem. This is all part of a systematic effort to halt international funding and support for Palestinian programmes across East Jerusalem, Gaza and the West Bank.

The strategy is to isolate Palestinian civil society while disregarding international law and global human rights standards. The message is clear: Israeli authorities are placing themselves above international norms, regardless of opposition from the international community.

We urgently need action, awareness-raising and pressure on decision-makers. But time is running out, and if this law passes, the damage will be immense.