Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
May 26, 2026
keep them in Israel for ten years!
The Tax Authority is putting together a law proposal (not sure which MK they will have submit it in the Knesset) that would require any Israeli who served in a technology unit in the IDF (any unit that focuses on research and technological development, cyber, and more) to stay, and found and keep any company they establish, in Israel for the first ten years following their release from the army. If the person might relocate abroad, he/she would still be considered a resident of Israel (for tax purposes) for the first ten years from the date of release.
Of the technological units in which people will be affected by having served there, 8200 is the most famous but there are many others as well.
People from the hitech industry along with tax experts are calling this proposal draconian and say they will fight it and work against its passage.
The motivation of the Tax Authority is that these young men and women who graduate from the IDF's technological units were invested in heavily by Ithe State of Israel and they were given knowledge and tools and skills throughout their IDF service. They use that investment of Israel in them to then establish companies, but sometimes they move abroad and the State does not benefit from that investment when they become successful. The purpose of this proposal will be to give them the status of Israeli resident for tax purposes even if they move abroad within the first ten years so Israel can tax them accordingly and benefit from their success which was built off the back of the State of Israel.
The new law, should it be proposed and pass, will not take effect retroactively and will only apply to new recruits from the point the law is passed.
Those who oppose the proposal are calling it a draconian law and are saying it opposes basic laws such as freedom of movement and employment, along with international tax conventions. They say it also negatively discriminates against graduates of these units in the workforce. The way to keep these technology graduates in Israel is by creating the environment in which they will want to stay.
source: Globes
I get the reason for the law. It makes sense in some way. But the State really gets back its investment in these young men and women during their army service. These units have tremendous accomplishments. Why does the ROI have to include taxes for it be reasonable? And many of them do stay in Israel (I wonder if there are numbers showing percentages of how many stay within the first ten years vs how many relocate abroad) so Israel collects taxes on them as well... I understand the logic of such a move but I think the complaint behind it is disingenuous.
What do you think?
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Dec 24, 2025
VAT-free shopping
Finance Minister Betzalel Smotritch yesterday signed into effect the order to expand the VAT exemption on personal imports to $150. It was $75 until now. The order is meant to go into effect today. I read somewhere that it can take 24-48 hours for online retailers to be fully updated, so be patient on your shopping sprees.
Second, Smotritch is right. At least partially. Local retail does largely overcharge. But. But. But. But local retailers need to pay and to charge 18% VAT (increased last year from 17%, and is now being considered for another increase again to 19%). Local retail businesses need to pay a lot of taxes and regulatory fees, including arnona which is being increased again.
There is opposition from small business organizations who feel this is unfair competition to them as they have expenses and have to charge VAT while consumers are now being encouraged to buy more online VAT-free. Smotritch, justifying the expansion of VAT-free imports, said this is....
part of “a broad and significant series of steps” aimed at lowering the cost of living, alongside efforts to shake up the banking and dairy sectors.
All of these steps are predicated on the proposition that “it can be cheap here,” he said, arguing that “the Israeli economy is often dominated by a small number of strong monopolies,” giving consumers only the illusion of choice.
“There is no reason why an international chain’s garment should be sold here for” significantly more than abroad, he argued. “There is no justification for a shoe that is sold in the United States for half the price – to be sold here for double the price.”
First of all, yay! Amazon and AliExpress, take all my money!
So yes, commerce in Israel is expensive, and the retailers take advantage when they feel they can and charge high prices, but some of those high prices come from the high taxes they have to pay and charge here in Israel. Smotritch can't really complain about them being expensive when he is comparing businesses with VAT and other taxes to businesses without VAT and those other high taxes..
While online retail is very popular, a lot of people also like to go into stores and buy thigns. Either they want to try the clothes on, or they want to buy something right now and walk out with it and not wait 2 weeks to get it and then see if it fits right or whatever. Many things don't ship to Israel. Many things are too expensive to ship to Israel. People will still go into stores. FM Smotritch should be helping and encouraging them to lower their prices as well by cutting their taxes - let local retail stores also sell up to a certain limit without VAT, or with lower VAT.
Whenever I have been to Eilat, including a relatively recent trip, it s busy everywhere and at all the activities. The busiest places, by my observation, are the malls and shops. People vacationing in Eilat take advantage of the VAT free shopping. People will continue to buy plenty in store around Israel, especially if VAT is lowered or done away with locally as well.
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Dec 4, 2025
taxes going up again?
After a long war that looks like it might soon be restarting, at least on some of its fronts, it is understandable a government would raise taxes. it has an expensive war to pay for, and semeingly will continue to have to pay a lot for an unknown amount of time. Finance Minister SMotritch and Prime Minister Netanyahu have both been bragging how strong the Israeli economy is despite the war, and there are defintiely signs of it being strong, but inflation has also been higher hurting people in the pocket.
Smotritch has said he will not impose new taxes on the public (it is an election year) and when Netanyahu said he wants to increase the defense budget by 350 million shekels over the next ten years Smotritch basically said over my dead body and he wont agree to raising taxes to cover it - he said the PM himself can take responsibility for that.
The other day Smothritch signed an order allowing local municipalities to increase the arnona tax on residents. Today Smotitch explains himself saying that isnt a tax we put on residents, the local municipality does, so dont blame us - they are allowed to increase the arnona rate, but we suggested they dont. Blame them.
The other day Smotritch announced he will soon be signing an order to double the VAT exemption on personal imports (aka online shopping from Amazon and Ali Express, etc) to $150 or maybe even $200, though he has not yet signed the order, which make consumers happy. Then it becomes known that he is considering raising VAT to 19% (PM Netanyahu seems to be opposed to this at this time).
Recently the Ministry of Transportation announced prices are set to go up once again in January after a very recent increase. After public outrage they cancelled that. Did they not think people would be upset when they initially announced it?
This is very strange for an election year. I guess they feel confident their base will support them no matter what they do, even increasing already high taxes.
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Nov 26, 2025
get out your wallet!
The news is reporting that Minister of Finance Betzalel Smotritch has annoucned his plans to sign an order in the coming days that would raise the personal import exemption from VAT to $150 form the current $75.
That means those orders form Amazon you make to avoid paying for shipping and taxes limiting the order to a maximum of $74.99, will soon become easier on you with the limit of free shipping with no taxes going up to $150 (and the new limit might even be set as high as $200).
I don't know what this will do to local businesses, and I am sure business owners and groups will complain about this, but consumers are definitely going to enjoy this change. Hopefully we wont spend way too much because of it, as if we already dont with the lower limit.
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Nov 28, 2024
taxes for Kan
I am in favor of privatization wherever possible so I have no real problem with the government shutting down (aka privatizing) "Kan", and seemingly eventually Galei Tzahal and maybe other stations and outlets...
I just am curious to see if they will lower taxes accordingly as per the savings from defunding Kan et al
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Jun 17, 2024
cutting out Turkiye
as reported on Ice, Minister of Finance Betzalel Smotritch has decided to punish Turkey/Erdogan for his continued support of Hamas and the declining, or deteriorating, relationship with Israel. To that end Smotritch has announced that import taxes on goods imported form Turkey will be increased to the rate of 100% taxes. This will be brought to the government for approval.
Obviously the idea of this is to hurt Turkey. They cant work against Israel and then expect us to just go about our regular business with them and import their goods helping their economy. With such high taxes it will not be profitable for importers to import from Turkey and will look for alternative sources to import from.
Smotritch is conditioning this on Erdogan's rule saying this emergency order will be nullified at the end of Erdogan's reign as President of Turkiye. I would assume if whoever follows Erdogan as President of Turkiye is just as anti-Israel the orders will be renewed (possibly), but we would like to believe the problem there is Erdogan and anyone who comes after him will be better and more favorable to Israel than Erdogan is.
From a political perspective I think this is a great idea and maybe even long overdue.
That being said, raising taxes, cutting out a major source of imported goods, is likely going to cause prices to rise. While we can easily say that is the price to pay for Zionism, for not supporting our enemies, for not supporting those who wish to harm us, Israel has always already been a pretty expensive place to live and in the past year it has gotten significantly worse and more expensive. This move is likely going to make it even more expensive. Maybe at the same time taxes are increased for Turkish goods, taxes should also be cut for goods form alternative sources.
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Mar 5, 2024
Tweet of the Day - Torah Tax
What do you think of this proposal?
דל"פ: המפלגות החרדיות צריכות לוותר על תקציבי הישיבות. נקים מערכת מימון עצמאית להחזקת לומדי התורה.
— אבי מימרן Avi Mimran (@avi1mimran) March 5, 2024
כל חרדי שעובד ישלם 'מס תורה' ויחזיק אברך, בזה אנחנו מאמינים.
התורה שמרה עלינו כעם יהודי 3000 שנה, אנחנו העם הכי קטן, הכי נרדף, והיחיד ששרד.
אם אברך מקבל מהמדינה כמה מאות שקלים בחודש,…
Translation:
Avi Mimran (Haredi journalist) tweeted:Unpopular Opinion: the Haredi political parties need to forego the yeshiva budgets from the government on their own volition. We will establish a system of funding from independent funding in order to support Torah learning.Every working Haredi will pay a "Torah Tax" and will support an Avreich, this is what we believe in.The Torah has protected the Jewish people for 3000 years, we are the smallest nation, the most persecuted, and the only one to have survived.If an Avreich gets a few hundred shekels a month from the State, we can replace the State.Alongside paying taxes to the State, we will add a Torah tax. We cannot come to terms with the fact that Avreichim give their lives for learning Torah in destitution and that we should abandon that protection they provide.We need an army to protect the landWe need the Torah to protect the nation.We have to give the Reservists their due respect, good wages and benefits.The Haredi parties can sit in Opposition, just like the Arab parties do. Their entire purpose of existence was to protect the funding of the Torah world. From the moment that goal is no longer possible, there is no longer any need to sit in the government.
So what do you think about this?
Regarding his conclusion - they can sit int eh government or not, nothing to do with the funding issue. Even if they go through with the plan as proposed, he didnt seem to suggest shutting the parties down because they are no longer necessary but says they can sit in Opposition. Maybe they should be shut down entirely, according to what he is saying. But even if what he suggests should ever happen, they will still fight to be in government - everyone, every party, wants to keep their hands close to the power and close to the kitty.
Regarding the proposal itself.... my thoughts:
1. how will they decide who has to pay the Torah tax? Obviously anyone who wants to can, but who will it be imposed on?
2. So the working Haredim have to pay full taxes to the government, which surely will not go down just because the Haredi parties forego the funding, and then also have to pay a Haredi tax? And if they cant afford that significant increase?
3. I assume the working wives of Avreichim will also have to pay this tax, considering they are working Haredim? or will only working Haredi men have to pay?
4. Is a few hundred shekels really enough? Avreichim get far more than a few hundred shekels a month - not all of it is directly money. As a matter of fact, most of it is in other benefits such as discounted daycare, discounted property taxes, discounted camps, discounted many other things, subsidies from Bituach Leumi and more. Will this Torah Tax of a few hundred shekels be enough to cover all of that?
5. Will simply creating a kollel fund that people can donate to, especially the gvirim who already support a nice chunk of the Torah community and would presumably continue doing so, not be enough? Add to that the various fundraising projects that are already done by many Roshei Kollel and Roshei Yeshiva along with community askanim and that will surely continue...
6. Would such a plan negatively affect all other forms of tzedaka - Haredi working men paying this tax would likely give far less to everything else such as local poor, local tzedaka funds and all the other issues, if they are giving a nice chunk already to one thing.
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Dec 18, 2023
UTJ clarifications
UTJ issued two clarifications a short while ago:
1. regarding municipal elections, they are in favor of postponing the elections until the end of February because of the war
2. Regarding the issue of taxing the sugary drinks - they are in favor of an educational campaign to teach people about the dangers of consuming too much sugar, but they are against doing it via a tax which is only damaging (ie costs people money)
Thoughts:
Thoughts:
Regarding #1 - interesting. I wonder why. At most they should not care or take a position, and at least they should be in favor of keeping it as scheduled by law as it seemingly helps them. I wonder why they are in favor of postponing.
Regarding #2 - this morning it was reported that the Aguda faction of UTJ led by Minister Goldknopf is against the tax. Yesterday it was reported that Gafni was ok with it. Now UTJ is saying no tax. I wonder if Gafni wasnt really in favor and the report yesterday was premature or if Goldknopf's veto is simply overriding. Additionally, it will be interesting to see what happens next - my assumption is that if UTJ doesnt get on board this idea will be dropped as per coalition agreements rather than making a coalition crisis. It was be especially interesting if Smotritch tries to keep it alive for a while, strengthening my initial thought I mentioned yesterday that this might be revenge for Arbel's insistence on keeping the election date for the end of January
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Dec 17, 2023
sugary drink tax is back
I was honestly surprised when I first saw this news item.
According to Ynet, Minister of Finance Betzalel Smotritch has decided to "unfreeze", or renew, bring back, the tax on sweetened drinks. Smotritch will do it slightly differently than before, as it was introduced under Lieberman's instruction - it will only be on sugary drinks and will not include diet drinks like Coke Zero, and it will also not be applied to sweet drinks such as grape juice that is used for religious ceremonies (ie kiddush on shabbos and holidays).
In my opinion diet drinks should be included as the sweeteners and chemicals used to make it drinkable in place of the sugar are probably equally or more dangerous from a health perspective (from what I have read, may not be accurate).
Why was I surprised? Because they made such a big deal about canceling the tax on drinks that Leiberman had imposed, turning it into an anti-haredi tax, as if only Haredim would be affected by it because only Haredim drink sweet drinks. Clearly not true but that is what it was turned into, and the Haredi parties made this a central part of their campaign before the last elections and added it to coalition agreements. So now Smotritch is bringing it back? Wow.
I suspected initially this might be revenge, somewhat, for Minister of Interior Moshe Arbel's insistence on holding municipal elections on January 30, against the requests of Smotritch due to the negative impact it will have on National Zionist candidates (among others) with a high percentage of candidates and staff fighting in Gaza or drafted to other areas for reserve duty.
Another option that crossed my mind was simply the need for money due to the adjusted budget for the war and the expected significant shortfall.
Now I see, according to Kikar, this was actually done in coordination with the Haredi parties.
According to the article, the Haredi parties were ok with adding the tax on the drinks as long as it wouldnt include grape juice and diet drinks, and that it would include an informational/educational campaign targeting the Haredi community to explain the damage caused by the sugary drinks.
I am not sure why the educational campaign needs to only target the Haredi community, but that seems to be the agreement. Plenty of people who have access to information on their own, such as via the internet, do not bother looking for it. I think everyone would benefit from an educational campaign about this, just like they always did from campaigns regarding smoking, drugs, alcohol and the like.
It is noted that if the talks with the Haredi representatives do not pan out and they decide to oppose the tax, Smotritch will have to reconsider because of the coalition agreements. As of now they are justifying this by saying they initially had to get rid of Lieberman's anti-haredi tax but now that this was accomplished done they can talk about finding a way to get the community to consume less sugary drinks.
So the same tax is back, with some adjustments (which probably could have been accomplished back then too had they been willing to talk) but now it is not anti-haredi.
Whatever gets you through the day, as they say.
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Nov 5, 2023
use their money against them
There is a little tax squabble between the Israeli government and the Palestinian Authority. The Israeli government has tax monies it has collected and held for the Palestinian Authority that it needs to pass along, as it always does.
Because of the war, and the public support for Hamas offered by the PA, some Israeli officials called for the tax monies to not be passed along. How can we pass along these monies to supporters of Hamas while we are at war with them?
After some back and forth, Israel said it would pass along the tax monies but would deduct from it the portion designated for Hamas and Israel would hold on to that.
After some back and forth, Israel said it would pass along the tax monies but would deduct from it the portion designated for Hamas and Israel would hold on to that.
The Palestinians did not like that either. Some Palestinian officials have put forth the position that they would protest and not take any of the tax money should the Hamas portion be withheld. All or nothing.
I dont know who they think they are threatening by refusing to take the money. So don't take it.
Israel should hold on to the money, if they do not want it, and publicly, letting everyone, including Hamas and the Palestinian Authority, know that the Hamas (if not all the PA) monies will be redirected to the war effort. It could be used to pay for some bombs to drop on Gaza, or for feeding the soldiers or for whatever. Another option would be to use it for rehabilitating the destroyed communities along the Gaza border, the communities that Hamas ravaged. That would maybe add some salt to the wounds they are sustaining now in this war.
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Nov 2, 2023
Quote of the Day
Israel will not allow the Palestinian Authority to transfer any money to the terrorists of Hamas in Gaza. The sum of what is designated for Gaza will be fully deducted from the tax payments to be transferred. What was will no longer be
-- Minister Yisrael Katz
if Katz is saying it you can be almost entirely sure that Gaza will get that money. Katz is the one who said not a single faucet of water will be turned on in Gaza, when deciding about humanitarian aid. Just days later Israel was letting Gaza have water and other things.
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Oct 15, 2023
Extensions
The Ministry of Interior has issued a memorandum recommending to postpone municipal elections across Israel due to the war and security situation.
Municipal elections are slated to be held on October 31. Because of the war, which at this time is expected to continue for a while, and so many people away from their homes and unable to vote, the Ministry is recommending reorganization by delaying the elections to January 2024. Hopefully by well before then the situation will have changed and election campaigns will be able to get under way, it will be safe to campaign and vote, and Israel can get back to normal.
The news has reported the government has accepted the recommendation and will be passing this into law in the coming days.
Additionally, I saw in the news somewhere but do not remember where, the Ministry is looking into the possibility of opening the election registrars for the communities down south that were just ravaged by terrorism so more people can submit candidacy for upcoming elections, in due time. Ofir Liebstein, a mayor (actually a regional council head) of Shaar Hanegev, was killed by terrorists last Shabbos, among all the others, so again, opening the registrars will assist in the reorganization of the communities.
On another note, but also an extension, the IRS has announced that Israeli citizens/residents who file federal taxes in the United States of America, have been granted an automatic extension from filing for the year 2022. The new date for filling for the year 2022 will be October 7, 2024. I said "Israeli citizens" but it really includes anyone whose place of residence is located in Israel, the West Bank, or Gaza, so Palestinians get this extension as well. Not that I am so fast or organized myself but it may take the Gazans some time to find their paperwork for filing taxes after the war is finished, so good on them!
Of course, if relevant, make sure you dont expect to get the complicated details of who this actually applies to from me. Speak to your account, check the details on the IRS website, and good luck.
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Jul 4, 2023
plastic bags in numbers
When the State does some social engineering with the various tools available to them, specifically taxes, I am always curious to discover if it worked out as intended, if they hit their goals, if it had less of an effect than expected or more or just what they expected, etc. Sometimes we are made aware of the results with various headlines and reports, but more often than not, we rarely seem to hear any follow up. I guess if you were really researching it you could find out, but the general articles on these things are often scarce, unless there is a particular interest in the matter.
The taxes on plastic bags in supermarkets is actually one of those things that has actually been followed up decently with the occasional article in general media letting us know how it is going. Maybe because it was so successful, I don't know.
The taxes on plastic bags in supermarkets is actually one of those things that has actually been followed up decently with the occasional article in general media letting us know how it is going. Maybe because it was so successful, I don't know.
Today we get more info on the effect of the tax on plastic bags. The tax went into effect in 2017 and the latest report compares the overall effect of the tax as of 2022, compared to 2016 right before the tax went into effect.
I would note that in many places in the Western world, plastic bags have been outright banned from use, at least from major supermarkets. You go into stores in Europe and you hardly see any plastic available. The USA is pretty close to the same, if perhaps there is still a little bit available in some places.
So, back to the report just put out by the Ministry of Agriculture, as reported on in Behadrei... As a caveat, the report was put out today because today is International No Single Use Plastic Bag Day - not nearly as fun as International Eat Ice Cream For Breakfast Dat, but still a day of note.
According to the report, the tax on plastic bags in supermarkets has been very successful at achieving its stated goals - decreasing significantly the use of such bags. In 2022 supermarkets sold 474 million plastic bags to customers. Sounds like a lot but back in 2016 before the tax went into effect, 1.754 billion bags were sold to customers - a dramatic decrease of 73% ! In 2021 501 million bags were sold, so the decrease got even deeper in 2022.
Other numbers for comparison would be the 5494 tons of bags purchased by supermarkets for use of their customers in 2022, compared to 9650 tons purchased in 2016.
It looks like taxes can be used to successfully social engineer society. If they want to slap taxes on other items (hint hint, sugary soft drinks) to train us to stop using them, they should look at what they did right with the plastic bags tax.
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importing milk
It seems there is a bit of a milk shortage here in Israel right now. I have no idea what the cause of the shortage is.
To combat the shortage, Finance Minister Betzalel Smotritch has decided to lift the tariffs on imported milk. They currently stand at 40%, essentially meaning importing milk is blocked, as no company will import milk at such a high cost, as it is not economically viable. Removing the tariffs entirely, for an initial period of three months, opens the market for milk imports. Milk in Europe is significantly cheaper than in Israel.
That being said, there are more challenges to importing milk than just the pricing.
Milk companies abroad will have to get kashrut certification. Sounds easy enough but it will be a challenge. The Chief Rabbinate of Israel does not allow the import of real milk (cholov nochri), only milk powder. And general producers of milk are generally not cholov yisrael, and the ones that are are usually more expensive, and also seem to have a shorter shelf life. So only cholov yisrael milk will be imported? Is there enough cholov yisrael milk in Europe available for import to make a dent in the Israeli market? Will the Rabbanut send mashgichim to dairy farms to supervise cholov yisrael milk the way they send to South America and other places for shechita? Will the imported milk prices still be relatively low after all those additional costs?
There are also practical issues such as the amount of time it takes to import milk, between the various regulations and bureaucracies and the amount of shipping and distribution time - when it hits the shelf will it already be spoiled or will it have, at best, an extremely short shelf life? The importers have requested regulation changes to make import faster to assist with this, but that has not yet been approved.
And possibly most importantly, if they turn this into a permanent arrangement, which would be great for the consumer, this will be heading to a massive political battle as local dairy farmers have been protected with their production. This will hurt local production and they have a strong lobby.
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May 30, 2023
more taxes to pass profits to the public
Finance Minister Betzalel Smotritch announced today that he intends to levy a very high tax on the exceptionally high profits earned from the increasing interest rates. Smotritch says they didnt earn these progfits by being more efficient or by hard work, but by playing with the par between the interest rates raised by the Bank of Israel that they collect on loans and the lower interest rate they give to clients for their savings accounts.
Smotritch said "I consider it very reasonable to levy taxes at a very high level on these very high profits, especially in order to prevent the banks from having the motivation to achieve them, and to cause them to pass some of those profits back to the public using tools available to them..". Smotritch explains that they should cut their unreasonable profits somewhat by paying out a higher interest rate to savings accounts as well, and the high tax on these profits would encourage that as banks would pay out the higher rates in order to be obligated in paying less tax.
The banks are pigs. Or how did the old saying go? Pigs get fat and hogs get slaughtered. They are a fine line away, if they didnt cross it already, from being hogs with the people's money, and the people have no choice but to continue using the banks. I have no problem with Smotritch slapping them with a massive tax. I just worry it might not solve the problem.
Smotritch thinks that if he slaps them with a massive tax they will pass on some of their profits back to the public in order to cut the profit form the bottom line and avoid the tax. Personally I think it is more likely they will cover their tax by increasing their already unreasonable fees they charge customers for every time they breathe in the vicinity of a bank. Smotritch says slapping them with this high tax will motivate them to pass it back to the public. I think it will too, but not in the same way he is thinking. The banks will just add their charges on customers to cover the tax.
I think a better move, maybe in tandem, would be to open the banking market to more banks. More competition means better rates and the public benefits.
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May 15, 2023
unbalanced reforms
thinking more about the arnona law mentioned earlier today, I still think it is a bad law.
I am thinking of it sort of in the same way as I think of the judicial reform. Reform is needed but they are trying to fix one problem by creating another. They are fixing a system that is unbalanced with too much power to the courts by going the opposite way and giving too much power to the government.
They are fixing a supposed unbalanced distribution of resources that eventually led to the better off cities having the ability to attract businesses with higher levels of arnona by taking away some of the money they worked hard for and giving it to poorer cities. Maybe the government should just give more resources to the poorer cities, the way they gave to the richer cities 50 years ago, rather than taking away fromt he rich cities now.
That being said, I now understand Bet Shemesh would be set to receive 20 million shekels a year from this program if it passes, so I guess I should support it... :-)
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the arnona law is just more socialism
Without bearing any expertise on the matter and without knowledge of all the details of how this is supposed to work exactly, I will still comment with my initial thoughts on the latest battle in Knesset.
As far as I understand it, in what is supposedly an effort to effect a decline in housing prices, the government is trying to pass what is called the "arnona law". Every city collects municipal taxes from its residents, and from businesses located within municipal borders. This arnona revenue is meant to be the bulk of any city's revenue to be used for funding garbage collections, maintenance around the city, education, activities, and whatnot. Cities collect one fee for residential properties and much higher fees from commercial properties. It seems that some cities choose to focus more on developing commercial property and build less residential, so that they can collect more arnona at the higher, commercial, rates. This supposedly causes housing prices to skyrocket due to a shortage of available housing. And there are some cities and towns that collect very nicely and are considered wealthy cities, while other cities and towns are poor with a lot of residents paying discounted arnona rates along with little commercial properties in their environs.
This supposed discrepancy is behind the arnona law. The arnona law would create a fund in which the wealthier cities in Israel would have to deposit a portion of the arnona revenues they collected (I dont know what the percentages are) and that fund would then distribute monies to the poorer cities to help "narrow the gap". This would also affect housing prices as it would somehow incentivize cities to build more residential housing, cutting down the shortage of supply of housing and stabilizing and lowering the prices.
Just on the face of it, this is socialism. Taking from the wealthier cities to give to the poorer cities. There is nothing right wing about these economics. Just on that alone it makes me think this is a bad idea. We need a freer economy, not a more restrictive one. It makes sense to me, I think, that residents pay their town municipal taxes in order to get municipal services. I dont want my municipal taxes going to pay for another cities issues. I already pay general taxes to the government and dont see why my municipal taxes should be redirected to other cities instead of being used to provide me with more and better services.
If the government wants to bridge the gap, it surely can find ways to do so without taking away my municipal services that I paid for - and cities who have money taken from them will surely cut municipal services.
Additionally, Minister of Finance Betzalel Smotritch has found a way to exclude the cities and towns in Jude and Samaria, over the green line from participating in this. Actually, they will retain the right to receive money from the fund but will be exempted from having to pay into the fund. There were also reports earlier today (though I dont know if anything will come of them) that the Likud is trying to find a way to exclude cities that are Likud strongholds so they do not get hurt by this.
I dont know if my city would receive money from this fund or if it would have to pay money into the fund. Obviously if my town will get money I will be in favor of this program because then I will benefit from it rather than lose from it :-) ... but seriously, this looks like robin Hood or some form of socialism/communism and cant be good. If we take away their revenue from investing in business and employment, what incentive will they have to continue?
It is interesting that the left wing parties are opposed to this saying it is a way to take money from the rich and give it to the Haredim and settlers. That might even be true (partially), but still - isnt that a big part of the left wing agenda? a bit of socialism, sharing the wealth, and all that?
I am open to hearing why my impression is wrong and why you think it is a good program.
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Jan 29, 2023
disposables havent been trashed after all
Mazel tov!
Finance Minister Betzalel Smotritch has now officially cancelled the tax on disposable plates and utensils. It has gone into effect.
Now we have to see if the stores drop the prices back to down to pre-tax prices or if they will continue to gouge the public (it was shown that they increased the prices by far more than the tax itself) at some level.
Minister of Environment Protection Idit Silman has said she is going to look for alternative ways to discourage and minimize use of disposables. She opposed the cancellation of the tax saying it proved itself efficient as it drastically decreased the use of disposables and the tax should not be cancelled until an alternative option is discovered. Other countries are even banning them outright.
Enjoy, and especially enjoy your soft drinks in plastic cups in just a few weeks when the soft drink tax cut goes into effect.
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Jan 10, 2023
disposable tax almost gone
According to news reports, Finance Minister Betzalel Smotritch today published his official draft for the order to cancel the tax on disposables.
Interestingly, Smotritch's order is to cancel the tax only until the end of 2023.
The government is expected to lose 330 million shekel in revenue from the tax cancellation this year.
I dont understand why he isnt canceling it outright, as was expected form the pre-election (and post-election too) chatter, but only holding it until the end of 2023. I guess at that point he can revisit it, but why not just cancel it outright, and if one day the government would decide to create such a tax, create it then. I am not sure if this is simply a procedural matter or if there is some sot of intention behind it. So far I have not seen it explained.
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Jan 4, 2023
have your cake and drink it too, no longer!
Woahoa!
We used to say you cant have your cake and eat it too! That may very well come true very soon, but you also actually may not be able to have it, let alone eat it. But you can still drink your Coca Cola once the tax gets cancelled in the coming days.
While Minister of Finance Betzalel Smotritch uses one hand to sign the order to cancel the tax on sugary drinks, with his other hand he is working on signing the order for new taxes on sugary foods instead.
According to Calcalist, Smotritch has ordered his staff to prepare a broader tax on junk food.
According to the article, Smotritch realized that the demand to cancel the tax on the drinks was purely political as according to the numbers the tax was actually very effective. While he realizes, due to coalition considerations, he has to play along and cancel the tax, he realizes something is needed both medically and economically due to the serious situation the stats show caused by the excess of sugar in our diets in Israel.
To that end he is looking to raise taxes on junk food, whether it has excess sugar or trans fats or salt. This will actually be a broader tax, as it will be on far more foods than if it just taxed sugary foods and will also have a broader affect medically.
I guess we'll see when he officially presents the plan and how that goes over. I guess we also have to see how he categorizes junk food. The candyman in shul might switch to giving out apples and carrots, but will the tax include things like eating at McDonalds and Burger Ranch? going for cholent and kugel Thursday night or at kiddush on Shabbos? And, perhaps the biggest question, will it also be slapped on the sugary drinks right after he cancels the first tax on them? Will his coalition partners go apoplectic on him as they did with Avigdor Lieberman or will they accept it because it is less directly targeting them (though I never really understood why they thought they drink Coke more than anyone else)
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