Finance Ministry director general Joseph Bachar on Sunday will replace on an interim basis Israel Tax Authority director Jackie Matza, who is under arrest in connection with a tax corruption scandal.

Bachar completes his term as director general on Sunday after three years in the post. Pressure on him to accept the temporary position increased over the weekend, leading him to postpone his private plans.

Matza, who decided to suspend himself temporarily from office, praised Bachar's appointment, and said he hoped it would return calm to the Tax Authority.

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Heading the lobby were Prime Minister Ehud Olmert, Finance Minister Abraham Hirchson, and senior figures in the Tax Authority, Treasury and business sector.

Bachar, an accountant by trade, is said to know the Tax Authority well and to be capable of stabilizing it during one of the most turbulent periods in its history.

The treasury announced Saturday night that Bachar would serve as acting Tax Authority director until it can be determined whether Matza can return to the position. According to Hirchson, Bachar displayed a sense of national responsibility of the first order, proving that the civil service and the future of Israel's economy stand at the top of his list of priorities.

Investigation continues
The police this week will continue their investigation into the corruption scandal, looking into the ties between the Prime Minister's Office, the Civil Service Commission and the Tax Authority.

On Thursday, Eitan Rub, who served as Tax Authority director until about a year ago, was released to house arrest.

The police have found that after the 2006 Knesset elections, PMO bureau chief Shula Zaken and Edna Alfasi, the assistant to Civil Service Commissioner Shmuel Hollander, met for several hours in a Jerusalem cafe and likely discussed matters of work, appointments, jobs and the like.

The name of Alfasi became public several months ago, after a clash between State Comptroller Micha Lindenstrauss and Hollander. The comptroller claimed Hollander had promoted Alfasi within the commission illegally because of the close ties between the two.

The Zaken-Alfasi connection will also be investigated in relation to Tax Authority legal advisor Moshe Mizrahi, one of Alfasi's siblings. Rub, who at the time served as head of the customs and VAT division, appointed Mizrahi to be legal advisor to customs and VAT as an external appointment. Even then there were complaints that Mizrahi had been preferred over qualified and experienced internal candidates.

When customs and VAT were combined with the income tax commission to form the Tax Authority, Rub chose Mizrahi over the income tax commission legal advisor to serve as legal advisor to the whole authority.

The police will investigate, among other things, if the Tax Authority enjoyed preferential treatment over the income tax commission regarding job positions.