Embassy: No Seizure of Funds

Posted by Edward Pentin

Monday, June 08, 2009 8:45 AM

Reports that Israel’s Chief Tax Collector had seized the funds of Catholic Church institutions in Israel in order to force them to submit to fiscal demands have been denied today by Israel’s embassy to the Holy See.

According to an earlier AsiaNews report, Yehezkel Abrahamoff of Israel’s Finance Ministry had ordered the seizure to force the Church to pay taxes without waiting the outcome of ongoing negotiations on the 1993 Fundamental Agreement between the Holy See and Israel. Central to those talks are fiscal statutes relating to the Church in Israel. AsiaNews said it had “both documentation and testimony” of Abrahamoff’s initiative.

However, Israel’s embassy to the Holy See issued a statement this afternoon which denied any such decision had been taken.

“In response to questions posed by various newspapers and following further investigation,” the statement read, “the Embassy of Israel to the Holy See has announced that the seizure of funds from the Ministry of Education destined for some educational institutions of the Catholic Church in Israel will not be made, and that the situation remains unchanged.”

The earlier reports had surprised those involved in talks over resolving outstanding issues related to the Fundamental Agreement as Pope Benedict XVI’s visit to Israel was expected to help bring to those talks to a conclusion.

Speaking earlier, Franciscan Father David Maria Jaeger, delegate of the Custody of the Holy Land, described news of Abrahamoff’s decision to AsiaNews as “an extraordinary step” which hopefully “will be disowned” by the Israeli government in the context of ongoing negotiations over the Fundamental Agreement.

Father Jaeger predicted that if the reports were found to have emanated from an uninformed individual functionary, then “in the next few hours it will disowned and overturned by his superiors, in keeping with the well-known treaty obligation of the State (in the framework of its Fundamental Agreement with the Holy See) to abstain rigorously from any such unilateral moves while negotiations are pending on the plane of public international law.”

It is not clear at this stage what sparked the earlier reports.

As noted in my last blog entry, under a de facto agreement based on a U.N. statute, the Church should be exempt from paying taxes on its property, and in fact has not paid taxes since the state of Israel was founded. But Israel has so far refused to offer a formal exemption, leaving the Church open to any summons to pay these taxes and therefore vulnerable to the whims of government officials.

Israeli officials are reluctant to give up these arbitrary powers, and to formalize a tax exemption which other religions in the country might also demand.

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