Tel Aviv Restaurants Threaten Strike During Eurovision Over Tax Policy

Instead of getting the same preferential status as tourism-industry workers, the Finance Ministry has thrown restaurateurs 'to the dogs,' protest leader says

Finance Minister Moshe Kahlon enjoys a bite to eat at Carmel Market in Tel Aviv, 2015.
Tomer Appelbaum

Ratcheting up their year-long battle against the Finance Ministry over two tough new tax policies, hundreds of Tel Aviv restaurateurs are threatening to close up shop during the upcoming Eurovision song contest.

A flood of foreign tourists is expected during the popular international event, which is being hosted in Tel Aviv from May 14 to 18.

Tomer Mor from Jeremiah Café, who has been spearheading the protest, says that he realized when meeting Finance Minister Moshe Kahlon nine months ago that he and his ministry don’t care about the restaurateurs – nor, says Mor, do the other branches of government. Mor and his colleagues are seeking to overturn two relatively new statutes: the "tips law"  and the "foreign workers law."  

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The so-called tips law, applying to restaurants, cafes and bars, stipulates that tips do not belong to the waiter or waitress but rather to their employer, who will remunerate their staff for the gratuities as part of their regular income. Among other things, this means that the tips get taxed at source. Enacted last year, the law went into effect in January. On the flip side, those who receive the tips are eligible for certain social benefits – but that is generally not thought to be adequate compensation.

As for the "foreign workers law," in September 2017 employers were hit with a 20-percent charge for the asylum seekers working for them, the same fee as for other foreign guest workers. The extra charge, which restaurant owners must deposit in a special account for the foreign staff, comes on top of a 16-percent fee that they must also deposit, which the workers can claim when they leave Israel. 

This law has increased the cost of employment by 50 percent per employee, says Mor, adding that it is also racist. 

So far hundreds of restaurant owners, not all of them from Tel Aviv, are mobilizing to “rescue the industry,” says Mor, and have launched an NGO called Restaurateurs Together (Mesadanim Beyahad); he believes that thousands more will join. While he and his local colleagues are in favor of Eurovision and happy that Tel Aviv will host the annual event  – it will be a major disgrace, says Mor, if hoards of tourists descend upon the city and find its restaurants closed. 

Specifically, the restaurateurs are seeking parity with the local tourism industry: The government should treat their businesses in the same way, says Mor, and subject them to the same policies as at the Tourism Ministry. Moreover, restaurant workers should be accorded the same preferential status as tourism-industry workers. 

Restaurants in Israel are big business, Mor points out, with a turnover of some 20 billion shekels ($5.54 billion) a year, employing a quarter-of-a-million people. Israeli cuisine is gaining fame worldwide but here, even though the Finance Ministry takes pride in local eateries, it “throws us to the dogs,” he claims.

Mor says that their representatives have met with Finance Ministry director general Shai Babad, who clarified “our place in line.” That is, the ministry doesn’t believe the restaurant industry is a major player in the economy, like Intel, for example – or, for that matter, even a minor player. 
“So I told him we don’t matter. And he said: exactly,” says Mor, but adds that maybe now that the restaurant owners are mobilizing, that attitude will change.