(JNi.media) The Knesset on Monday gave its final approval to a bill that would reduce the corporate tax from 26.5% to 25%.
The introductory notes accompanying the bill say that “according to the Treasury’s data, the current corporate tax rate is one of the main reasons for the slowdown in the growth rate of the Israeli economy… A reduced corporate tax rate is expected to increase the competitiveness of Israeli companies and encourage the companies to increase their investments in the market.”
MK Zehava Galon (Meretz) said, “This law is going to make things easier for the corporations instead of making things easier for the citizens, and it will help those groups in the market that already enjoy exemptions. Instead of taking this money and investing it in the weaker populations, we are giving it as a perk to big companies?”
MK Manuel Trajtenberg (Zionist Camp) asked, “What purpose does this serve? What is the macro-economic measure behind this? Behind this reduction is a return to the prime minister’s agenda of `starving the monster`, as he says, meaning lowering taxes in order to make it possible to reduce the public services provided by the government to the citizen.”
Finance Minister Moshe Kahlon (Kulanu) said he was in disagreement with some members of the opposition regarding Israel`s tax policy. “According to my worldview, there are two horses that can carry the Israeli economy: One is taxes, and the other is investment in market reforms. Reducing the corporate tax creates growth and encourages investments. If it will be possible, we will reduce it further next year, and you will see how it creates growth… You will see that next year five billion shekels from value added tax will reach the economy.”
Forty-eight MKs supported the bill in its third and final reading, and 30 MKs opposed the legislation.