Kiryat Shmona Sues Government Over Canceled Business Compensation Deadlines
Kiryat Shmona municipality petitioned the High Court of Justice against the government, demanding the reversal of decisions halting business compensation for indirect war damages.
The municipality of Kiryat Shmona filed a petition with the High Court of Justice against the Israeli government, the Minister of Finance, and the Tax Authority, challenging the termination of business compensation eligibility.
The municipality demands the cancellation of a government decision and a Tax Authority announcement from July 30, 2025, alongside a Property Tax and Compensation Fund director ruling from September. These directives determined that compensation for indirect damages under the "red track" for Kiryat Shmona businesses ceased on March 1, 2025, with all compensation ending on June 30, 2025.
Disputing Arbitrary Deadlines
The petitioners argue that the state established an arbitrary, unpublished, and unjustified deadline that dictates the survival of hundreds of local businesses. Kiryat Shmona remains a designated border town under the Property Tax Law, with residents evacuated since October 2023 under state directives.
The petition stresses that the city suffered severe economic paralysis during the Swords of Iron war. Business compensation directly correlates with the official duration of the inflicted damage recognized by the state.
Alternative Relief Sought
The municipality asks the court to extend the compensation period from October 7, 2023, until the official end of hostilities, or at least through the end of 2026. Alternatively, the petitioners request compensation coverage for periods where Home Front Command or Northern Command restrictions remained active after March 1, 2025, including operations "Am Kalavi" and "Shagat HaAri".
Additionally, the petition urges the establishment of a proportionate framework for the repayment of business advances, factoring in the actual evacuation duration, state delays, and reliance interests.
