The Israeli government is considering draft legislation aimed at restricting foreign funding of non-governmental organizations, Israeli media reported on Thursday.
Non-profit organizations active in the public arena and receiving foreign funding are to lose their status as public institutions, thereby losing their tax-free status and being hit with a 65% tax, the reports said.
Many human rights organizations in Israel and the Palestinian Territories depend on foreign funding, and the new law could severely impact their ability to function, the reports said.
Its full text is to be presented to the relevant ministerial committee on Sunday before submission to parliament.
The aim of the taxation is "to prevent foreign interests gaining the upper hand," Ariel Kallner, the lawmaker from Prime Minister Benjamin Netanyahu's Likud party responsible for the law, tweeted on Thursday.
Kallner accused European countries of deliberately undermining Israel's interests through their funding activities.
A previous draft law aimed at human rights organizations was withdrawn some years back under international pressure.
The latest proposal was grounds for "grave concern" to many of Israel's partners, Germany's ambassador to Israel, Steffen Seibert, tweeted.
"Lively and unhindered relations between civil societies are of essential value in our liberal democracies. We will continue to raise the issue with our Israeli friends," Seibert said.
There was criticism from the United States and France as well.
The new law is part of the coalition agreement of Netanyahu's right-wing religious coalition that took office at the end of December as the most right-wing government in the country's history.
