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January 20, 2017 / 22 Tevet, 5777

Posts Tagged ‘Finance Minister’

Income Tax Employees’ ‘Italian Strike’ Threatening Israeli Economy

Sunday, December 18th, 2016

Israel’s Tax Authority employees have been on an “Italian” slowdown strike, Globes reported on Sunday, citing a CFO who said all tax withholding and VAT payments have been frozen. He was told by TA staff: “We’re on sanctions.” According to other reports, the TA has not been approving real estate deals for some time, and tax collections are being delayed as well.

Seeing as the tax year is about to end, many fear that taxes withheld in 2016 but not transferred to the TA may not count towards their 2016 reports, but be applied instead to 2017, which could cause hardships to small businesses, to the point of endangering their very existence. “There’s no one to talk with,” the CFO told Globes.

President of the Institute of Certified Public Accountants, CPA Izhar Kanne, has sent a letter to Finance Minister Moshe Kahlon, warning that the log-term sanctions at he TA “cause mortal injury to the business and economic activities of the country’s citizens and inflict enormous damage on the national economy.”

According to Kanne, the sanctions are hurting the ongoing work of Israeli businesses with businesses abroad, as the absence of TA approval, payments from Israeli businesses and academic institutions to these providers are delayed, which could have dire consequences, especially to academic institutions. He also pointed out that thousands of young couples are unable to purchase their first home because the TA has not been issuing to them the necessary forms.

Eventually, Kanne predicted, “the routine work of Israeli CPOs will be damaged, resulting in a situation where unjust fines would be imposed on their clients, while the state treasury would be hurting as well.”

Talks between the union and the Finance Ministry will resume Sunday, according to Calcalist, and on Monday there will be a meeting with Shai Babad, Director of the Ministry of Finance. The TA employees have been clear: “The sanctions will be further increased if they don’t negotiate with us to raise workers’ salaries soon – the TA will be frozen completely.”

The only TA operation that continues to run smoothly with no interruptions is providing compensations to victims of the recent wave of fires. Otherwise, critical damages will ensue both to Israel’s economy and to individuals and businesses. Vadim Evenstein, Income Tax Employees’ Committee Chairman, told Globes that the past four weeks’ sanctions suspended, among other things, all assessment discussions, which have a Dec. 31 statutory limit, meaning that come Jan. 1 2017, they would be lost to the state. “In just one assessment department we have files worth one billion shekel,” he warned.

The employees blame the Finance Ministry for being entrenched in its refusal to discuss raises. Meanwhile, the same employees point out, Israeli banks have given as much as $400 a month in raises to their employees who are on a par with TA employees. “Our workers have degrees in accounting and other degrees, yet they receive the lowest wages – the highest academic status [in the civil service] with the lowest pay,” Evenstein told Globes. “Is it any wonder our most gifted workers leave after three or four years, having gained knowledge and experience?”

JNi.Media

Finance Committee Approves Long Term Savings for Every Child Retroactive to Jan. 2015

Sunday, December 4th, 2016

The Knesset Finance Committee on Sunday gave its final approval to the long-term savings plan for every child, to take effect January 1, 2017. Starting on this date, the state, through Social Security will deposit 50 shekel ($13.10) each month for every child until he or she turns 18, or 21, if the child or their parents decide to stay in the program an additional three years, in which case they would receive a 500 shekel ($131.00) bonus from Social Security.

Parents will be allowed to set aside an additional 50 shekel for their child out of the children’s allowance they receive from Social Security. They will be asked to pick a savings bank or a fund, without mobility between those plans. The plan is expected to yield for every participating child as much as 22,000 shekel ($5,764.00) by the time they turn 21.

The plan will be presented for two final votes at the plenum in the coming days.

Finance Committee chairman MK Moshe Gafni (United Torah Judaism) congratulated the Finance Ministry on its willingness to backdate the implementation of the law to as early as the start of next year. He reminded the committee members that it was his faction which pushed for the savings plan. He also expressed satisfaction at the ministry’s returning children’s allowances to their level in 2013, before then Finance Minister Yair Lapid (Yesh Atid) had his way with them.

The monthly deposits will be adjusted according to the cost of living index. All management fees for the individual savings accounts will be paid by the state.

The committee approved a 2.7 billion shekel ($710 million) indemnification across the board to pay for the new plan through 2019, with retroactive payments for 2015-16.

MK Manuel Trachtenberg (Zionist camp), who was his party’s nominee for finance minister before the last elections, said he is voting for the plan because it is good and valuable, but protested the indemnification at the expense of other government social programs.

MK Mickey Levy (Yesh Atid) also praised the program and condemned the indemnification, which was added to earlier cuts, comprising altogether an estimated 5.2% of the current budget.

JNi.Media

State Dept. Not Huge Fans of Netanyahu Video on Peace and ‘Ethnic Cleansing’ [video]

Saturday, September 10th, 2016

One of the disturbing points few in the media discussed back in 2005, when the Israeli government was strong-arming its 8,000 or so citizens off their lands in the Gaza Strip, was the fact that no one was entertaining the possibility of letting the Jews of Gaza become citizens of the Palestinian Authority. In fact, one of the things government agents took care of early on in the process was to disarm the residents of Jewish Gush Katif, so that they, too, wouldn’t dream of staying and defending themselves on their own.

Now one of the Israeli politicians who voted 4 out of 5 times for the program to exile the Jews of Gaza, including the dead and buried, then Finance Minister Benjamin Netanyahu (Likud), has begun to ask that very question, this time regarding the Jews of Judea and Samaria: how come no one is talking about transferring the Jewish communities, along with their people, over to Palestinian Authority rule, as a legitimate Jewish minority with equal rights? Why is everyone insisting the area must remain free from Jews?

In a video he posted this weekend, Prime Minister Netanyahu is asking why everyone around the world is convinced Jewish settlements are such a threat to peace. Because while no one would seriously claim that the nearly two million Arabs living inside Israel are an obstacle to peace, having close to half a million Jews living in Judea and Samaria makes peace impossible.

“It’s called ethnic cleansing,” Netanyahu says on the video, noting that while Israel’s diversity “shows its openness and readiness for peace, the Palestinian leadership actually demands a Palestinian state with one pre-condition: No Jews.”

On Friday, State Dept. Press Office Director Elizabeth Trudeau used her daily press briefing to rebut Netanyahu’s accusation, although a careful reading of her attack on the PM reveals she didn’t really answer his main argument.

The reporter who cited the Netanyahu video did a good job of digging up the key points, saying the PM is “talking about settlements and talking about the Palestinians wanting to have a state that has no Jews in it at all and saying that this is ethnic cleansing. And he also says that that demand is outrageous, that it’s even more outrageous that the world doesn’t find it outrageous. And then he says some otherwise enlightened countries even promote this outrage.”

Trudeau responded: “We obviously strongly disagree with the characterization that those who oppose settlement activity or view it as an obstacle to peace are somehow calling for ethnic cleansing of Jews from the West Bank. We believe that using that type of terminology is inappropriate and unhelpful.”

She explained that “settlements are a final status issue that must be resolved in negotiations between the parties,” and the next line out of her mouth was: “We share the view of every past US administration and the strong consensus of the international community that ongoing settlement activity is an obstacle to peace.”

So, to reiterate, 1. Shame on you, Mr. Netanyahu for using bad words; 2. We will deal with the status of those Jews in Judea and Samaria when everything else has been resolved; 3. Jews living in Judea and Samaria are a menace to peace.

Why? What if the PA and the Israelis decide that they want Jews living in a free Palestinian State, carrying Palestinian passports and enjoying equal rights? How then would today’s settlements have been a threat to peace?

Trudeau continued with the familiar, regurgitated statements about the thousands of new settlement units being built (we wish) and the vicious demolitions of illegal Arab structures in accordance with Israeli law, which the US should respect but doesn’t. She then announced that the US is “engaging in direct conversations with the Israeli Government on this. … We’ll have our conversation with our Israeli allies and friends and we’ll see where that goes.”

Not everyone in Israel is happy with the Netanyahu video. MK Ayman Odeh, Chairman of the Joint Arab List, accused the PM of revising history. And MK Tzipi Livni (Zionist Camp) said that with one video Netanyahu managed to wipe out her accomplishments in the Sharon government, guaranteeing that the clusters of settlements would remain part of Israel as part of a two-state solution.

Israeli rightwingers will probably start drilling the PM on Sunday, after they emerge from their Shabbat rest. They won’t be happy with the fact that the PM has so openly entertained the possibility of a Palestinian State as a given fact. But the points Netanyahu made were sound and they could go a long way in stirring the presidential campaign’s foreign policy debate.

JNi.Media

A First: Kibbutzniks to Pay Personal Income Tax

Thursday, August 4th, 2016

Individual kibbutz members will be required to pay a 25% personal income tax as well as the Social Security Healthcare tax starting next January, according to a move by the Finance Ministry, Israel Hayom reported Thursday. The new taxes are expected to enrich the Finance coffers by close to $80 million annually, and the Social Security income by about $50 million.

Since the beginning of communal history, each kibbutz used to pay a corporate tax for all the members, and even after the change in taxation kibbutz members without outside income will not be required to file individually. But over the past few decades many kibbutz members have been working off the kibbutz grounds, contributing a portion of their income to the cooperative — and the Israeli tax authority would like to take a peek at those monies.

The Finance Ministry’s new rule must still go through the Knesset Finance Committee for approval, and the agricultural lobby is expected to put up a hard fight against the changes.

Amitai Porat, the Religious Kibbutz Movement Secretary General, and Nir Meir, the Kibbutz Movement Secretary General, on Wednesday wrote Prime Minister Netanyahu requesting that he halt Finance Minister Moshe Kahlon’s proposed changes in the tax code regarding kibbutzim. They told the PM that “Minister Kahlon is not interested in meeting us to find a solution that would make it possible to reexamine the tax code while maintaining and protecting the kibbutz character and the communal life in which we believe.”

David Israel

Finance and Justice Ministries to Crack Down on Gambling

Wednesday, August 3rd, 2016

By Michael Zeff/TPS

Jerusalem (TPS) – Finance Minister Moshe Kahlon and Justice Ministry Director General Emi Palmor announced at a joint press conference on Wednesday evening that gambling machines and horse racing are to be outlawed in Israel.

“Israel’s weakest and poorest are being sold illusions and false hopes every day,” said Minister Kahlon. “As of next year, there will not be a single gambling machine or any horse racing in Israel.”

There are currently some legal forms of gambling permitted in Israel though most are outlawed. The only authorities licensed to provide gambling services are Mifal HaPayis, which operates the Israeli national lottery, and the Sports Betting Council, which manages betting on various sports events. The gambling machines belong to the lottery while horse-race betting is run through the Sports Betting Council.

The announcement was made after a report published on Wednesday by the Commission on Gambling Regulations, a joint think-tank headed by the directors general of the two ministries.

The commission’s recommendations include a limit on the size of the legal gambling sector, a prohibition on operating games with an addictive nature, a tax raise on money earned through gambling, and various other limitations.

The report expects the implementation of its recommendations to drastically curb the growth of the gambling sector in Israel and thus decrease its influence on the Israeli population.

Minister Kahlon announced that he would adopt and implement the recommendations to their full extent.

“It is no coincidence that these gambling machines are found mostly in poor neighborhoods. It is also not a coincidence that we see a sharp rise in lottery revenue the day after welfare checks are sent out every month,” Kahlon explained.

The report claims that while a certain percentage of the gambling revenue accrued by these authorities is meant to go to charity and to state education and welfare projects, only a small amount actually does.

The report further states that there will be a reduction in the operating costs of the Sports Betting Council and the lottery, such as in advertising and sales commissions, thus increasing the state’s share of the revenue.

“Unregulated gambling exclusively and deliberately targets and hurts the country’s weakest communities so as long as I am finance minister, there will be no casinos in Israel,” concluded Kahlon.

TPS / Tazpit News Agency

Bill Approved to Increase Competition in Israeli Financial Sector

Monday, August 1st, 2016

By Michael Zeff/TPS

Jerusalem (TPS) – The Israeli government unanimously approved legislation to increase competition in the Israeli financial sector on Sunday.

According to a Finance Ministry spokesperson, the legislation aims to shatter the current banking sector oligopoly by allowing new players to enter the financial and banking sector thus increasing market competition.

“The problem with Israeli banks is that they all suffer from a lack of efficiency in costs, which is necessarily rolled on to the consumers of their financial services,” Professor Omer Moav, an economics expert at the University of Warwick, told Tazpit Press Service (TPS). “Competition can help that. Allowing foreign banks to offer services, even through the Internet for example, will decrease costs and increase efficiency.”

The bill was proposed by Finance Minister Moshe Kahlon and is an implementation of recommendations made by the Committee on Increasing Competitiveness in the Economy. The committee was formed by Minister Kahlon and the Central Bank of Israel (CBI) in order to find legal ways to increase competitiveness and efficacy in the otherwise concentrated and cartelized Israeli banking system.

“The changes mandated by this law, mainly the recommendation to separate the banks from the credit companies, will create an advanced banking system and more competitiveness in the retail and small business fields in the upcoming years,” said CBI Governor Karnit Flug.

The main clauses of the bill include a separation of the major Israeli banks from Israeli credit companies. The three largest Israeli banks also currently own and operate the credit card companies.

The three banks, Hapoalim, Leumi, and Discount, together control about 75% of credit in Israel. The new law will force Hapoalim and Leumi at the least to sell their existing credit card companies.

In addition the new law will provide certain protections and incentives for potential new actors to enter the Israeli market, such as more flexible regulations to help them compete with the major banks.

“The bill also includes a pathway to the establishment of entirely new Israeli banks, better oversight on existing banks and on their competitiveness, the creation of new and improved databases for credit card companies, and the advancement of technology and innovation in local banks,” Governor Flug elaborated.

However, the measures proposed by the bill have been previously criticized by the International Monetary Fund (IMF) of which Israel is a member.

According to the IMF, the government committee that provided recommendations for the bill used old data in its analysis thus rendering the basis of the reform faulty and potentially harming the stability of the entire system.

While Flug and the CBI supported the bill and helped shape it to a large extent, Flug cautioned the government to implement the law responsibly. “An increase in the number of banks and financial brokers that are not banks means a higher risk of collapse,” she contended.

TPS / Tazpit News Agency

Knesset Committee Approves Submission to US IRS Tax Compliance Act

Tuesday, July 12th, 2016

After weeks of debates, on Monday the Knesset Finance Committee approved a bill to apply the Foreign Account Tax Compliance Act (FATCA), which the US has already signed with 113 countries. The 2010 federal law enforces the requirement for US citizens living abroad to file yearly reports on their non-US financial accounts to the Financial Crimes Enforcement Network (FINCEN). The law also requires all foreign financial institutions (FFIs) to search their records and to report the assets of US citizens living abroad to the US Department of the Treasury.

Finance Committee Chairman MK Moshe Gafni (United Torah Judaism) was able, after lengthy negotiations with the Israeli Finance Ministry, to increase the protection of Israeli citizens whose information will be handed over to the US, and reduce in half (from about $27 thousand to about $13 thousand) the sanctions against financial institutions that fail to comply with new law for technical reasons. Gafni also managed to change the definition of charity organizations in the Haredi community (Gmachim), changing their definition from “financial institutions” to “organizations that benefit the public,” thus removing them from the FATCA zone.

The committee also succeeded in repelling the Israeli tax authority, which wanted initially to be able to use information gathered by Israeli banks for FATCA to their own local tax collection ends. As Gafni put it, “This is a bad law, and to come now and use it for other purposes that have nothing to do with its essence would be unthinkable.”

The issue of forcing foreign financial institutions and foreign governments to collect data on US citizens at their own expense and transmit it to the IRS has been attacked outside Israel as well. Former Canadian Finance Minister Jim Flaherty objected to the law’s “far-reaching and extraterritorial implications” which require Canadian banks to become extensions of the IRS and could jeopardize Canadians’ privacy rights.

There have also been reports of many foreign banks refusing to open accounts for Americans, making it harder for Americans to live and work abroad.

JNi.Media

Printed from: http://www.jewishpress.com/news/breaking-news/knesset-committee-approves-submission-to-us-irs-tax-compliance-act/2016/07/12/

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