Demographic Engineering Through Tax Credits
- ACRI
- 4 days ago
- 2 min read
On June 4, 2026, ACRI filed a petition with the Supreme Court on behalf of five residents of Nazareth, demanding the repeal of the Encouragement of Mixed Urban Settlement Law (Temporary Provision), 5786-2026. The law adds a section to the Income Tax Ordinance granting residents of a “mixed urban settlement” in the Negev or Galilee regions, in which the percentage of non-Jewish or Jewish residents is between 35% and 55%, a tax credit of 12% of their income. Although the wording of the law is ostensibly neutral, in practice it was intended to provide a targeted benefit exclusively to Nof HaGalil. Acre, the only other locality meeting the criteria laid out by the law, already receives an identical benefit under the existing system.
The petition argues that the law was tailored specifically for Nof HaGalil and is racially motivated. Moreover, it is intended to advance the demographic objective of preserving a Jewish majority in the city through a tax benefit based on the national composition of its population — a criterion that is (or at least should be) irrelevant to the allocation of tax benefits. The petition further argues that the law was enacted without any factual basis, contrary to the opinions of professionals in the Ministry of Justice, the Ministry of Finance, and the Tax Authority, while circumventing the general and equal benefits system established in the Income Tax Ordinance. It constitutes the use of governmental power for discriminatory demographic engineering.
The petition further argues that the law is a violation of the constitutional rights to equality and human dignity, and reflects discriminatory treatment toward the Arab population, particularly the residents of Nazareth. Nazareth is in a more difficult socioeconomic position than Nof HaGalil and suffers from significant negative migration, yet it is excluded from the benefit because of the composition of its population. We asked the Court to repeal the law or, alternatively, to remove the “mixed urban settlement” condition for receiving the benefit and apply the benefit equally.
HCJ 13590-06-26 Zoubi v. The Knesset
Attorney: Gadeer Nicola
The petition, June 4, 2026 (Heb)
This petition was written with the assistance of ACRI legal intern Michele Amzalak
