Bennett Expresses Shock Over Tax Law, Considers Repeal
Translated & summarized from Ice by baba
Minister Naftali Bennett expressed shock at the "Current and Trapped Profits" tax law, calling it "crazy" and admitting he was unaware of its details. The law taxes undistributed corporate profits, impacting real estate investment. Bennett stated the government would seek to soften or possibly cancel the law, citing its negative effect on growth and businesses. Other officials acknowledged public criticism and pledged to review and potentially amend the legislation, while also discussing budget priorities and reducing bureaucracy.
The story in 6 lines · by baba
- Minister Naftali Bennett expressed shock at the "Current and Trapped Profits" tax law, calling it "crazy" and admitting ignorance of its details.
- Bennett stated the government would seek to soften or possibly cancel the "Current and Trapped Profits" tax law due to its negative impact.
- The "Current and Trapped Profits" law taxes undistributed corporate profits, with a 2% annual penalty or dividend payout requirement.
- Yaron Gindi, President of the Tax Consultants Association, called the law a "professional mistake" that suppresses growth.
- Shaul Meridor acknowledged widespread public criticism and pledged to review and potentially correct the law.
- MK Avigdor Lieberman reiterated his opposition to tax increases and called for cuts to coalition funding and government ministries.
At the annual Tax Consultants Association conference in Eilat, Minister Naftali Bennett expressed surprise and concern over the "Current and Trapped Profits" tax law, a mechanism designed to tax accumulated, undistributed corporate profits. The law, which imposes a 2% annual penalty on undistributed profits or requires dividend payouts, is expected to negatively impact commercial and income-generating real estate by discouraging companies from reinvesting profits. Yaron Gindi, President of the Tax Consultants Association, described the law as a "professional mistake" that "fundamentally suppresses growth" and has no parallel internationally. Bennett, admitting he was unaware of the law's specifics and personally affected by it, stated, "I cannot promise here that we will cancel the law immediately, because I must see the overall picture, canceling the law will lead to revenue loss and I must act responsibly. The goal is definitely to soften, and perhaps even cancel." He was particularly taken aback by a provision where profits exceeding 25% of turnover incur a 50% tax, exclaiming, "Crazy. A bunch of greedy people, what is the money going for? For 23 billion shekels in coalition funds that broke all records. You enlightened me, I didn't know that."
Shaul Meridor acknowledged the widespread public criticism of the law, stating, "The number of comments I hear from citizens about this law is enormous." He pledged to examine the law's intent with professionals and make necessary corrections. MK Avigdor Lieberman reiterated his stance against tax increases, advocating instead for reducing coalition funding and closing government ministries to address the significant rise in the defense budget. He emphasized the need to rewrite the budget and invest in high-return areas like R&D and high-tech.
Bennett also highlighted the importance of integrating the Haredi population into the workforce to avoid tax hikes. Meridor added that over 10 billion shekels could be reallocated from inefficient uses to better ones without touching taxes. Gindi raised the issue of excessive regulation, calling for courage to cut through the "unnecessary monster." Bennett responded that tackling bureaucracy is a top priority, emphasizing the need for political leadership with private sector experience to drive such changes.