Israel Launches Compensation Fund for Businesses Targeted by Racketeering
Translated & summarized from Vesty by baba
The story in 5 lines · by baba
- Israel's Tax Authority will compensate businesses up to 2 million shekels for damages from racketeering.
- The program covers property damage after refusing to pay extortion or reporting to police.
- Claims require police reports and proof of insurance issues or prior coverage.
- Damaged property must be assessed before repairs, except for clearing debris.
- The pilot program is funded with 30 million shekels and runs until December 2026.
Israel's Tax Authority has opened a claims process for business owners whose property was damaged after refusing to pay protection money or reporting extortion to the police. The program, which offers up to 2 million shekels in compensation, aims to alleviate the difficulties businesses face in obtaining insurance for intentional property damage due to racketeering threats. The maximum payout covers direct damage to both the business premises and the owner's home.
Initially, the program will cover damages incurred between October 4 and December 4, 2026. Eligible applicants must be owners of legally operating businesses with valid licenses and active tax accounts. Compensation can be claimed for damage to buildings, inventory, and equipment, as well as the entrepreneur's residence. Claims, along with necessary documentation, must be submitted to the Tax Authority's compensation fund within seven days of the damage occurring.
Crucially, damaged property cannot be repaired before an assessment by the Tax Authority's property tax assessor, though clearing debris and broken glass is permitted. Premature repairs may jeopardize the claim. To qualify, entrepreneurs must report the incident to the police, and their complaint must be recognized as related to extortion.
Further requirements include demonstrating that the business either previously had insurance coverage for intentional property damage which is now unavailable, or that the insurance company denied the specific claim. Business owners must also prove they met the insurer's requirements for property protection and risk reduction. For damaged buildings, proof of legal construction is necessary.
The initiative, based on a government decision, has received approximately 30 million shekels from the Ministry of Finance for its pilot phase. The property tax service within the Tax Authority is managing the payouts. The program is intended to reduce the fear among entrepreneurs of refusing extortionists or reporting crimes to the authorities. It exclusively covers direct property damage, not lost income or harm to third parties. The Tax Authority estimates that claim processing could take up to eight months.
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