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The Magazine of The Evangelical Lutheran Church in America

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LWF appeals decision to tax Lutheran hospital

On Feb. 12, the Lutheran World Federation filed an appeal of a Jerusalem court's decision to rescind the tax exemption agreement between Augusta Victoria Hospital in Jerusalem and the State of Israel. The court's Dec. 22, 2002, ruling canceled the agreement as of the end of 2000, with back taxes due.

Augusta Victoria began its work under the Red Cross after the war of 1948. Since 1950 the LWF has owned and managed the nonprofit hospital, which serves Palestinians in East Jerusalem and the West Bank. The tax exemption agreement was established in 1966 by the Hashemite Kingdom of Jordan and adopted by Israel after the war of 1967.

In its appeal, the LWF said Israeli authorities did not give lawful notice or make a lawful decision to cancel the agreement. LWF officials said they were given no chance to argue their case or explain what such a decision will mean for its patients and Israel.

The appeal says the loss of tax-exempt status means "the discontinuation or reduction to an absolute minimum of the activity of the Augusta Victoria Hospital in East Jerusalem, including all the clinics." The health clinics serve about 40,000 people in villages around Ramallah. It will also end the LWF's health services to "tens of thousands of patients" and lay off employees from "areas in which the unemployment rate is in any case unbearably high."

Additionally, the petition states that Israel will face a substantial loss in income tax payments from LWF employees.

Hospital CEO Tawfiq Nasser said ending the agreement will "greatly hamper the hospital's ability to provide much-needed health care to the refugee and disadvantaged segments in the community." More than half of the patients live in refugee camps. For many, the hospital is the only available provider of cancer treatment and other services.


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