The Knesset is delaying implementation of sharing information with foreign governments about foreigners with Israeli bank accounts even further, due to politicking over ultra-Orthodox lenders and tax benefits for certain Israeli towns.
The Knesset Finance Committee has already delayed implementation of the Common Reporting Standard, to which Israel has committed, for months.
The committee’s chairman, MK Moshe Gafni, has been delaying the implementation due to his demands for changes to the legislation regulating the interest-free loans offered by some ultra-Orthodox charities, or gemahs.
On Monday, the committee approved an amendment to the gemah regulation. The change was supposed to come up for a vote in the Knesset Finance Committee on Tuesday, but in the end that didn’t happen.
As a result, the Knesset Finance Committee voted in favor of the CRS regulations, but Gafni immediately submitted a demand for a new vote, stating that he was doing so in order to guarantee a Knesset plenum vote on the gemah regulation.
The gemah legislation could have been expected to pass without incident if it hadn’t been for clauses added over the past few days that have nothing to do with gemahs. These clauses relate to income tax breaks for residents of towns in outlying areas and near conflict zones.
During the outgoing Knesset, the terms for inclusion in the list of towns eligible for tax breaks changed, in response to a High Court of Justice petition that argued that the standards for inclusion were being applied unequally, that they involved political considerations, and that they discriminated against Arab towns.
While the new conditions were applied transparently and increased the number of eligible towns, they resulted in several towns being left off the list, including Kfar Vradim. The clauses added to the gemach bill would have kept Kfar Vradim on the income tax benefit list.
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