Tel Aviv can give up its duty free and leased cars
If it seems that Tel Avivians did show enough solidarity with the war effort, then here is your opportunity.
Here is your sacrifice, the one you can burn on the sacrificial altar of patriotism: Give up your leased automobile.
No, I am not joking.
I am appealing here to your national conscience. At the same time that your brothers in the North were suffering a rain of rockets, absorbing both physical and financial blows ? and while over 100 families paid the ultimate price on the altar of Israeli security ? you in Tel Aviv can do something small and give up your leased car.
Or maybe you could pass on the duty free shopping at Ben Gurion Airport.. Or on your educational savings fund, or even possibly on part of the tax break on pension accountants for those who earn between NIS 14,000 to 29,000 a month.
The State of Israel will now need every available shekel for its budget. Defense expenditures for the war are expected to be enormous, along with the sums needed to rehabilitate the civilian infrastructure in the North.
The process of drawing conclusions from the war will cause a massive retooling of systems, which will be painful and problematic. And such conclusions may well lead to the abandonment of such basic principles as controlling the deficit and keeping it from becoming an unbearable burden on future generations.
The country?s morale is in the pits, and that also will affect the level of business activity and investment in the economy.
It is bad enough that Israel suffered a blow in the security arena, but the Lebanon war will most likely cause a serious economic blow too.
Nevertheless, the advantage of difficult times lies in the opportunity they provide to make hard decisions. Decisions that in normal times raise a riot ? but in the light of an emergency no one has the strength or will to fight them any longer.
This is exactly the time to reach the correct decisions about the state budget. Not the easy decisions, such as making an across the board cut in all government ministries ? for example haven?t we already decided that education is a national priority that it is prohibited to touch the funds needed for it. Instead we need to make the true, honest decisions about where to cut the fat out of the budget.
And there is no shortage of such fat: First of all in the area of tax exemptions. For example, the exemption in Tel Aviv for leased cars. Of course I am talking about the absurdly low value for tax purposes for the use of such a car - well under the real cost of such a vehicle.
For a long time the treasury has been trying to cancel this exemption, much to the vehement protests of high tech workers.
So now, when many of these workers were drafted under emergency call-up orders to fight in Lebanon, the time has come for their comrades who remained behind to also contribute to the war effort ? and give up on their tax break on their leased cars.
The treasury can easily raise NIS 1 billion to 1.5 billion.
Eilat was one of the few cities in Israel that actually benefited from the war in Lebanon. The occupancy rates in its hotels reached 100% as Northern refugees fled south. Eilat can also contribute to the war effort and give up its exemption from VAT.
In any case, the exemption was exploited mostly by Israelis who made the trip to the Southern city to stock up on diapers and mineral water.
This exemption had no real contribution to foreign tourism in Eilat. Even worse, it is unlikely that Eilat ? a booming and strong city ? needs such a perk that much poorer cities such as Bnei Brak or Sderot don?t receive.
This is an exemption that was born in sin, and now is the time to get rid of it. The state can raise another NIS 300 million by doing so.
Another NIS 800 million are hidden away in the tax exemptions on educational savings funds, and another billion shekels goes mostly to farmers from the lack of VAT on fruits and vegetables. The poorer classes are not the ones who benefit from this VAT exemption, as most people assume: they spend much more on meat ? and meat is subject to VAT.
But let us not forget the last exemption. It may be small ? worth only NIS 100 million a year to the treasury ? but it is particularly infuriating in its unfairness.
This is the exemption from customs duties at Ben Gurion Airport, and is better known by the name Duty Free shopping. This exemption is particularly loved in Tel Aviv.
Since only the upper-middle classes ? and up ? enjoy this exemption when they travel overseas, and those who benefit the most are those rich enough to travel more often ? has the time not come to get rid of this tax distortion, and then Tel Aviv can finally have a clear conscience?
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