Jerusalem municipality freezes millions from UN and church bank accounts

The Dormition church on Mount Zion in Jerusalem. (photo: Anna Kaplan / Flash90)

Jerusalem mayor using international organizations in budget dispute with Finance Ministry.

By Michael Bachner | The Times of Israel | Feb 4, 2018

Jerusalem enjoys an annual “capital grant” from the [Israeli Finance Ministry] that helps it offset low tax revenue due to large populations with relatively high percentages that are not part of the taxpaying workforce, including roughly a third of the city’s population that is made up of ultra-Orthodox Jews and another third of Palestinian Arabs.

The Jerusalem municipality has handed out fines totaling millions of dollars to properties owned by the United Nations and by churches, citing a new legal opinion that says the properties are not legally defined as places of worship and therefore aren’t entitled to exemptions from property tax.

The step appeared to be an escalation of a dispute between the municipality and the Finance Ministry over funds. Mayor Nir Barkat has been conducting a high-profile campaign against Finance Minister Moshe Kahlon that included instructing workers to dump trash at the entrance to the ministry offices in Jerusalem and threatening to lay off more than 2,000 city employees.

The municipal authority said Sunday in a statement that it has started collecting over NIS 650 million ($188 million) from some 887 properties in Jerusalem belonging to various churches and UN agencies, after notifying the Prime Minister’s Office as well as the finance, interior and foreign ministries of the plan about two weeks ago.

Over the last week, the municipality has fined the Catholic Church almost NIS 12 million, the Anglican Church more than NIS 7 million, the Armenian Church NIS 2 million, and the Greek Orthodox Church about NIS 500,000. It took the sums by placing a lien on the churches’ bank accounts, and said that was only the first stage, with more to come.

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