Finance Committee Approves Extension of VAT Exemption for U.N. Fuel to Gaza’s Power Plant Until End of 2024

The Finance Committee, chaired by MK Rabbi Moshe Gafni (United Torah Judaism), voted on Monday to approve the regulations that extend the exemption from value-added tax on fuel given to “an international aid organization that has been recognized by the director-generals of the Ministry of Finance and the Ministry of Defense, provided that the types of fuel and the amounts have been approved by said director-generals prior to their purchase.” The exemption also requires the approval of the Coordinator of Government Activities in the Territories, in order to increase the supervision over eligible organizations.

The exemption was extended until the end of 2024, at the finance minister’s request. The ordinances are meant to regulate the supply of fuel by the United Nations to the power station in the Gaza Strip, to ensure a steady supply of electricity to Gaza’s residents. During the meeting it was clarified that the United Nations Office for Project Services (UNOPS) is currently the only aid agency that is eligible for the tax exemption.

Defense Ministry official Nir Azuz said that for years now the ministry has put in a lot of effort to stabilize the security situation in Gaza, by implementing both civilian and security measures. “One of the measures is supplying fuel to the power station, to enable the distribution of electricity to the residents of Gaza. In practice, the measure is implemented by the UNOPS, with our supervision and the U.N.’s supervision. We recommend to extend the full exemption, which has been granted in the past few years. The fuel is purchased in Israel and transported in trucks directly to the power station, in a supervised manner,” Azuz said.

MK Sharen Haskel (National Unity Party) said, “Who is running the power station? Hamas? Is Minister [of Finance Bezalel] Smotrich aware that he is bringing a [tax] exemption for fuel designated for Hamas on the day Hamas announced that it is taking out its nighttime harassment units? After you attacked and slandered us, you are bringing this for approval today? After yesterday’s murderous terror attack?”

Azuz said in response that the power station is operated by the electricity authority in Gaza.

MK Hamad Amar (Yisrael Beytenu) said, “Is the fuel supervised once it crosses the border? This government accused the previous government of supporting Hamas, and now it copy/pastes and approves. You are either a fully right-wing government, or you are a government that is all talk. You approved the same regulations in your previous government. You are a government that is all talk.”

Committee Chair MK Gafni said, “These are the exact same regulations that you approved, and we are bringing them up for a vote.”