Netanyahu’s tax break panned as shameless against backdrop of economic meltdown
Even as the country plunges into a coronavirus-instigated economic crisis, Prime Minister Benjamin Netanyahu received personal tax benefits from parliament this week, to the tune of hundreds of thousands of shekels. The timing of the step has elicited the rage of many newly jobless Israelis, some of whom cite the dizzying contrast as proof the millionaire premier is removed from the increasingly financially strapped public.
Liron, a hairdresser in the upper-class Tel Aviv neighborhood of Ramat Aviv, called the decision by the Knesset Finance Committee on Tuesday “disgusting.”
“It is go’al nefesh,” he said, as he carefully applied dye to a customer’s locks. “Especially in light of the fact that there are so many people without a job now.”
Liron, who is among the lucky ones who got their jobs back after being furloughed when the economy was shut down in March as the virus spread, voted for Benny Gantz’s Blue and White party in the March elections. Gantz has now formed a unity government with Netanyahu, and Liron said he is disappointed and feels his vote has “gone into the trash.”
Liron’s disgust with the prime minister’s new perks is likely resonating widely with some 800,000 jobless Israelis, who have seen their income and prospects evaporate as the coronavirus wreaks havoc on the economy. Unemployment surged to a peak of 27.8% on May 10, with over 1 million people unemployed or on unpaid leave, as lockdowns and social distancing restrictions were instituted in response to the pandemic.
Even as Israel has eased the restrictions and lockdowns, unemployment rates that were below 4% before the pandemic struck were still estimated at a whopping 20.8% on June 23.
The economy is expected to contract in 2020 by some 6.2%, or by 8.3% if there is a second wave of the virus, compared to last year, an OECD report said earlier this month.
Against this dire economic outlook, the Knesset Finance Committee on Tuesday gave the go-ahead for Netanyahu to receive a tax break reportedly worth close to a million shekels ($270,000) on payments, services and benefits he got from January 2009 to December 31, 2017.
The perk is for fringe benefits that Netanyahu, already one of the nation’s wealthiest lawmakers, got from the state. These include renovations to his private home in Caesarea, including fixing the pool and gardening work, and use of the bulletproof prime ministerial car, on which he would normally need to pay taxes.
In 2018, it was legislated that the prime minister’s use of his official vehicle would not be taxed, and that the state would bear the costs of his private residence in addition to the official residence in Jerusalem, and the prime minister would not be taxed on these benefits.
Tuesday’s legislative clauses pertain to the period prior to the passage of the 2018 law, as the Tax Authority issued a bill to Netanyahu requiring him to pay taxes on the perks he received between 2013 and 2017.
Netanyahu ally MK Miki Zohar told the Finance Committee on Tuesday that paying the taxes would have left the prime minister — estimated last year by the Israel edition of Forbes magazine to be worth NIS 50 million (approximately $14 million) — “financially crippled.”
“It is unfathomable that the prime minister should pay half a million shekels in taxes,” Zohar said at the meeting, The Marker business daily reported. “Whoever requires this is seeking to personally hurt him.”
A representative of Israel’s Tax Authority present at the meeting was unable to say whether former Israeli heads of state had benefited from similar breaks.
Netanyahu’s current monthly salary of NIS 56,345, of which he takes home an estimated net NIS 28,000, according to financial website Calcalist. All of his and his family’s expenses at his residence in Jerusalem are paid for, including electricity, municipal and food bills, as well as cooks, security personnel and drivers. The state also foots the bill for the costs of Netanyahu’s private home in Caesarea, which in 2015 amounted to NIS 298,000, according to Calcalist.
The Tuesday measure passed 8-5, with one abstention from opposition Yamina MK Bezalel Smotrich who protested the “unfortunate timing” of the vote.
Lawmakers from the Blue and White party, partners in the prime minister’s coalition, did not vote, while opposition parties slammed the move. Opposition leader Yair Lapid of the Yesh Atid party said that “while businesses collapse and hundreds of thousands of people are unemployed, the Knesset Finance Committee is dealing with one thing: tax benefits for Bibi,” Netanyahu’s nickname.
Indeed, even as citizens protested the lack of government response to their distress outside the Finance Ministry, the Knesset Finance Committee spent three hours on Tuesday debating the Netanyahu tax break.
Likud previously responded to reports about the Netanyahu tax clause by saying that the prime minister was not seeking anything that had not been granted to previous holders of the office.
“The prime minister is not asking for any special terms,” the party said in a statement. “The Finance Committee will require Netanyahu to pay tax exactly like previous prime ministers. There was an outrageous and personal attempt to charge Netanyahu with tax that was not required of any other prime minister. There will not be one law for Netanyahu and another for the previous prime ministers.”