Kiryat Shmona Sues Government Over Extended War Damage Compensation
Translated & summarized from i24NEWS by baba
Kiryat Shmona has petitioned Israel's High Court of Justice against the government and Tax Authority, demanding an extension of compensation for businesses harmed by the "Swords of Iron" war. The city argues the February 2025 deadline is arbitrary, as economic damage persists, citing business bankruptcies, reduced turnover, and a partial return of residents. The municipality seeks to overturn the uniform deadline, highlighting the ongoing impact on local commerce and the need for continued support.
The story in 5 lines · by baba
- Kiryat Shmona is suing the Israeli government and Tax Authority for extended war damage compensation.
- The city argues the February 2025 compensation deadline is arbitrary and economic damage continues.
- Data shows 54 businesses in Kiryat Shmona went bankrupt, and turnover significantly decreased.
- Only 55% to 76% of residents have returned, impacting the customer base for businesses.
- The municipality seeks to cancel the uniform deadline and allow for continued recognition of damages.
The Kiryat Shmona municipality has filed a petition with the High Court of Justice against the Israeli government and the Tax Authority, demanding an extension of the recognition period for indirect damage sustained by the city's businesses due to the "Swords of Iron" war. The municipality, acting on behalf of business owners and residents, argues that the state's arbitrary decision to set February 28, 2025, as the end date for compensation is flawed, as the economic damage continues to affect the city.
The petition asserts that hundreds of businesses are still suffering from ongoing economic harm, and the Tax Authority's deadline lacks sufficient factual basis. Kiryat Shmona seeks recognition of damages from October 7, 2023, until the city fully recovers to its pre-war state. The city is not requesting specific compensation amounts but rather the cancellation of the uniform deadline, which was set without individual justification or an appeals process.
Data presented by the municipality highlights the severity of the impact: out of approximately 350 businesses operating before the war, 54 have gone bankrupt. The city's turnover decreased from NIS 778 million to NIS 589 million, and net VAT collection plummeted from NIS 23 million to NIS 12 million. Only 55% to 76% of residents have returned, meaning a significant portion of the customer base is still absent.
The petition also details the challenges faced by business owners who reopened after extended evacuations and shutdowns, including dispersed customers, employees finding work elsewhere, demanding suppliers, and the need for reinvestment in long-idle equipment, all while fixed expenses remain and revenues have not recovered.
Furthermore, the municipality points to the state's own acknowledgment of the war's ongoing impact, citing the Tax Authority's extension of claim submission deadlines to August 31, 2026, due to the effects of Operation "Shorash Ha'Arie" on businesses. This, they argue, contradicts the February 2025 end date for Kiryat Shmona's business damages.
The government has been ordered to respond to the petition by January. This legal action follows the municipality's September announcement that businesses had not fully resumed operations, with some remaining closed. The municipality emphasizes that the lawsuit aims to protect business owners excluded from compensation, not to secure funds for the municipality itself. Notably, Mayor Avichai Stern, who had previously criticized the government for neglecting the north, joined Prime Minister Benjamin Netanyahu's election campaign shortly before the elections, thanking him for his work for Kiryat Shmona.