Israel Launches Pilot Program to Compensate Businesses for Extortion-Related Damage

The Israel Tax Authority has launched a pilot program to compensate business owners whose property has been damaged as a result of refusing to pay protection money, or 'protkshan,' and subsequently filing a police complaint. The program, which began Sunday, will cover damages incurred between September 24, 2026, and November 23, 2026, with a compensation cap of up to 2 million shekels.

To be eligible for compensation, business owners must meet a strict set of conditions. These include filing a police complaint recognized as being related to extortion, proving that they could not obtain insurance coverage for the malicious damage or that their claim was rejected by the insurance company, and providing documentation that the structure was built legally. The compensation is intended only for legitimate business owners with a valid license and an active file with the Tax Authority.

Furthermore, applicants must submit their claim online within seven days of the damage occurring. It is also prohibited to repair the damage before filing the claim and having an assessment by a property tax appraiser, with the exception of basic cleanup of glass and debris. Failure to adhere to this rule could lead to the rejection of the application. The Tax Authority estimates that processing these claims could take up to eight months.