With the Knesset expected to dissolve and new elections planned for January 22, the current government is still hoping to obtain Knesset approval for a series of bills on Monday, at least upon first reading.

Full passage of legislation generally requires three readings before it becomes law, but the government will gain a tactical advantage if it manages to get the bills passed tomorrow on first reading. This way, when the next Knesset begins its legislative activities, the bills still will be considered pending legislation.

The Ministerial Committee for Legislation will be requested to approve eight pieces of legislation on Sunday that will then be submitted to the Knesset plenum, with efforts expected to get full passage of several bills. Among the proposed laws are the following:

Construction delay tax

Finance Minister Yuval Steinitz is seeking to have legislation fully passed on all three readings that would impose a tax on firms that delay residential construction. The bill is an effort to expedite the construction of additional residential housing and in the process bring down prices in that sector. It would impose a tax on any company that has the right to build at least 200 housing units, either alone or with another firm, on one or more plots of land, and that delays doing so.

The legislation is based on a recommendation of the Trajtenberg committee, the public panel convened to develop policy to lower the cost of living. The panel noted that large quantities of land are being held by a small group of landowners who sometimes prefer to undertake limited construction of housing to maintain pricing levels. The tax would not take effect for three years.

Trapped profits law

The Knesset will be asked to give final approval, on second and third readings, of the so-called "trapped profits" bill, which would grant tax breaks to multinational companies which invested in Israel based on a law encouraging such investments and have been holding profits here that they wish to move out of the country. Collectively, the companies have an estimated NIS 120 billion in "trapped profits" here, and the government has viewed legislation that would encourage them to pay some level of tax as a way of generating much needed revenue for the treasury.

The government's bill would give the multinationals a tax break of 40% to 70%, and treasury officials say the firms would end up paying an effective tax rate of 6% to 17.5% on their profits rather than 10% to 25%, as currently provided by law. The Finance Ministry hopes to generate NIS 3 billion in additional tax revenues in the coming year if the bill passes.

Authors' bill

The Knesset Education Committee will consider a bill to address book pricing tomorrow, and in this case as well, Culture and Sports Minister Limor Livnat is hoping to gain full passage of the bill before the elections. MK Einat Wilf said she plans to obtain a formal legal opinion in a bid to have the law passed even after the Knesset disbands. The bill would require that once a book is available for sale, its stated price must remain unchanged for the first 18 months after publication other than during specific special sale periods specified in the law. It would guarantee Israeli authors an 8% royalty on the first 6,000 copies sold and 10% thereafter during the first 18 months after publication.

Among other legislative efforts, the Tax Authority is seeking to close a loophole in existing laws that gives tax breaks to manufacturers producing for the local market, whereas the initial intent of the legislation was to limit the tax break to producers selling their merchandise abroad. The legislation over which an initial memorandum of law is being circulated, would have retroactive effect.