Knesset Committee Approves Million-shekel Tax Break for Netanyahu

Netanyahu will enjoy a tax break on payments, services and privileges he has received as part of his job for the years 2009 through 2017

Hagai Amit
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Prime Minister Benjamin Netanyahu and MK Miki Zohar attend a Likud faction meeting, November 18, 2019.
Prime Minister Benjamin Netanyahu and MK Miki Zohar attend a Likud faction meeting, November 18, 2019.Credit: Emil Salman
Hagai Amit

Amid Israel’s worst economic crisis in years, the Knesset Finance Committee approved retroactive tax reimbursements for Prime Minister Benjamin Netanyahu on Tuesday worth about 1 million shekels.

The clause, approved following a heated session that lasted three hours, states, “Tax imposed on the prime minister on account of income from payments, services and gifts from the state related to his duties as prime minister will be at the expense of the state.” 

What this means is that Netanyahu will enjoy a retroactive tax break on payments, services and privileges he has received as part of his job for the years 2009 through 2017.

The Tax Authority is currently demanding back payment of these taxes for the years 2013 through 2017.

However, this is a more limited version of the initial proposal, which had not specified that it applied only to payments, services and gifts from the state.

Along with a salary that is five times Israel’s average wage, Netanyahu receives a car with a driver, an official residence at the center of Jerusalem with a full staff, coverage of living expenses for himself and his family, and coverage of expenses on his private home in Caesarea.

The proposal was a test for the coalition of Likud and Kahol Lavan.

MKs from Kahol Lavan skipped the discussion, leaving Likud, United Torah Judaism and Shas MKs to face off against opposition party representatives from Yesh Atid, Israel Beiteinu and the Joint List.

The coalition MKs decided that on top of the other terms Netanyahu receives, he does indeed deserve retroactive tax reimbursement worth about 1 million shekels.

MK Oded Forer of Yisrael Beiteinu began the discussion with a demand for the estimated cost of Netanyahu’s benefits, and a legal opinion from the attorney general. Neither of these were presented.

MK Miki Zohar, coalition chairman, was the first Likud representative to speak. “I hope we can prevent a discussion today on political issues and ‘Yes Netanyahu, no Netanyahu’ because we’re going to discuss critical issues for every prime minister. This is a debate on the status of Israel’s prime minister – whether he’s someone facing constant attempts to cripple him economically or whether he can live respectably... it’s unfathomable that the prime minister pay half a million shekels in taxes. Anyone who demands this wants to hurt him personally.”

Zohar noted a 2018 law he drafted that exempted the prime minister from taxes on gifts. 

Had it not been passed, the prime minister’s take-home salary would be 17,000 shekels a month, Zohar said.

MK Ram Ben Barak from Yesh Atid retorted, “Israel has tax laws and they determine what everyone pays.”

During Tuesday’s discussion, it emerged that discussions on that 2018 law were what prompted the tax authorities to investigate Netanyahu’s finances and demand back payment for benefits received between 2013 and 2017. The large majority of this is over state expenditures tied to Netanyahu’s Caesarea home. 

The tax bill is only a small portion of the state expenditures on Netanyahu’s behalf.

Previous reports have said the state spends some 300,000 shekels a year maintaining Netanyahu’s Caesarea home.

By law, any gift or money given in the framework of work relationships is subject to income tax.

As far as is known, these issues did not arise for previous prime ministers because they did not have similar demands for funding expenses related to additional homes, and certainly not to the extent that Netanyahu demanded. If previous prime ministers were not taxed on such expenses, it was due to Tax Authority oversight.

In an interview with Army Radio on Tuesday, Zohar said that it is “unthinkable that the prime minister of Israel, whose salary dropped to around 17,000 shekels (about $5,000)” should need to pay back taxes. “No citizen wants the prime minister of Israel to pay out of his own pocket to be our prime minister,” he said, emphasizing that “today the prime minister is not in a position where he needs to think about how he’ll make ends meet; he has a salary with which he provides for the basic needs of his family.”

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