A Worthy Recommendation

The process of appointing the head of the Tax Authority is highly sensitive, and the involvement of finance ministers in the procedure could very destructive.

The position of head of the Tax Authority is an important and powerful one. The Tax Authority chief wields tremendous macroeconomic influence, as the individual who sets Israel's tax policy, as well as enormous microeconomic influence, because he calls the shots when it comes to the tax portfolios of certain people and companies.

The past decade was marked by several scandals in the Tax Authority, the biggest one involving the bribe taken by former authority head Jackie Matza. Matza allowed outside elements to influence decisions made at the Tax Authority, in exchange for help from these same elements in promoting his cause in the finance minister's office and securing his selection for the post. The Tax Authority has yet to recover from the crisis that ensued in the wake of Matza's conviction. The lesson to be learned from the Matza affair is understanding how sensitive the process of appointing the head of the Tax Authority is, and how destructive the involvement of finance ministers in the procedure could be.

Yuval Steinitz - Ofer Vaknin - 25102011
Ofer Vaknin

Current Finance Minister Yuval Steinitz did well to set up a serious, professional committee to recommend candidates for the post. The committee, headed by outgoing Finance Ministry Director-General Haim Shani, decided after two months of interviews to recommend Moshe Asher - a senior Tax Authority official, but not a member of the authority's management.

The finance minister did not like the committee's recommendation. In fact, he disliked it so much that he is thinking of setting up a new committee to begin the entire round of interviews again. Apparently, Steinitz objects to Asher because he is seen as lacking the required administrative experience for the post.

The committee also thought so, but it transpired that experienced candidates refused to take the job. So the committee thought Asher was the best candidate out of all the options it had, and gave excellent reasons for its choice.

In view of this, and of the great sensitivity in appointing a Tax Authority head, the finance minister would do well to adopt the committee's recommendation. Any other decision he makes - and certainly an attempt to set up a new committee - will set an extremely unfavorable precedent in the public sector in general and the Tax Authority in particular.