Treasury Head Offers Union Boss Wiggle Room on Taxation

"When people sit down, talk and understand the other side's problems, it's possible to solve them. I can't say exactly where the treasury's flexibility regarding the proposal to tax study funds will come from, but if Ofer Eini sits down with me for a talk, we might have some maneuvering room to offer him," Finance Ministry Director General Yoram Ariav said yesterday in an interview with TheMarker.

Ariav urged the Histadrut labor federation chair to call off his threatened general strike over the plan to repeal some of the current tax exemptions on study funds (kranot hishtalmut). He called Eini's strike threat "an emotional and disproportionate response."

"The plan is a top-notch social welfare-oriented plan," Ariav said.

"It distributes the burden better and provides certainty, which also positively affects economic growth. We are convinced of the justness of the program, but we are definitely open to comments. It's not a pistol being put to anyone's temple - and we also understand the sensitivity of the kranot hishtalmut, and are willing to discuss the issue."

Ariav stressed that the treasury's current plan would not abolish the study funds' tax-exempt status, which it had proposed doing in the past. It merely reduces the exemptions, but in such a way as to maintain the funds' attractiveness as a savings vehicle.

According to Ariav, the proposed changes "provide tax cuts and certainty to employees and employers, while at the same time guaranteeing economic growth and the continued decline of Israel's debt."

Ariav added that the treasury's proposal is based on a relatively moderate forecast for national economic growth - 3.5% annually until 2015, compared to more than 5% a year on average for each of the past five years.