Feb 15, 2011

Corrupt Water Works

The past few weeks has been harsh for the Israeli consumer. Prices have been ricing across the board Gas prices went up again twice in recent weeks to unprecedented highs. The government only brought down the prices slightly a couple days ago when they realized the threat of major public protest was increasing rapidly. Then the prices of basic goods started going up. And we have been told that water prices are going to be rising yet again.

The price of water is a major issue. Water was given a special tax, due to the serious drought and water shortage. Then the tax was canceled, but the price of water was raised. Then it was raised again, and now it is being raised again. And somewhere in the middle of all this, Mayor of Bet Shemesh Moshe Abutbol decided to follow the instructions from the Finance Ministry, instructions that many mayors, including previous mayor of Bet Shemesh Dani Vaknin, have refused to follow, and established a separate company to deal with water issues and removed it form the authority of the iryah. One of the consequences of this is that now we have to pay an additional 16% tax on the water - when it was controlled by the iryah there was no VAT tax, but now that it is a separate company the VAT has to be added on.

Now, if that was the way it had to be, so be it. However, many iryahs have refused to implement this change and establish the external company, saying that there is no reason to do so and it will just cost the taxpayer more money and provide no added benefit. Abutbol jumped very quickly to implement the program, saying he just had to do it and had no choice, even though he had previously expressed opposition to it.

Minister of Interior Eli Yishai said yesterday at a deputy mayors conference that the Finance Ministry forced the transfer of authority of the water systems to external companies and took, in exchange, the price of added human resources, directors and deputies, consultants and treasurers, legal teams, secretaries, buildings and cars - all these logistics plus VAT tax. Nobody is doing this in good faith.

Yishai said that we are talking about half a billion shekels flowing into the Finance Ministry coffers on the backs of the citizens of Israel. He called upon the government to cancel the requirement of external companies. (source: Globes


  1. "many" municipalities refused? I thought it was only the one in Rosh HaAyin.

    And while they might complain, most mayors jumped to implement it because ultimately they got to do a few friends or relatives favors by appointing them heads of companies with completely established infrastructure, and guaranteed to be profitable.

    Not sure if it's a compliment to Mei Shemesh or an insult to Bet Shemesh Shefa department, but we've found Mei Shemesh far more responsive than 106 to leaks and other repair needs. It's as if Shefa tolerates a certain percentage of unresolved calls, while under Mei Shemesh leaks and biyuv get the higher priority that these issues should.

    But if they could drop the 16% tax that would be a good thing. Who says water has to be taxed?

  2. iryah = municipality

    English in English please!

  3. VAT = Value Added Tax!

    So not VAT Tax, that's just redundant redundant!

  4. oh go spell פרעה


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