"Disclose Teva's past assessments in disputes with the state, and explain whether it is proper that a company with a profit of NIS 1.5 billion pays a negligible tax rate, while 90% of companies pay an average tax rate of more than 20%," Labor Party chairwoman MK Shelly Yachimovich asked Minister of Finance Yuval Steinitz during question time in the Knesset today.
Yachimovich's question came in response to a "Globes" exposé yesterday that Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) paid an effective tax rate of just 0.3% on its profits in Israel in 2012. Yachimovich has called to convene the Knesset Finance Committee to discuss why most companies pay the full tax rate while a "coterie of companies pay negligible rates, which systematically harm government revenues."
Yachimovich demanded information on whether the differences between Teva and the Tax Authority's positions in the tax assessments of the company. She also demanded to know what happened to the NIS 200 million tax payment demand made against Teva last year.
"This is a huge and disproportionate gap, which indicates the current distortion in the tax system. Huge corporations which make billions in profits pay pennies and a tax rate that is a fraction of a percent, while small and mid-sized enterprises pay the full companies tax," writes Yachimovich on her Facebook page.
"Where is the money? How is the deficit of tens of billions of shekels to be covered? There, Netanyahu, there. Not from VAT on fruits and vegetables. Not from the teachers' study funds. Not by cutting old age pensions. Not from mass witch hunts of small independent businesspeople, turning them into potential small informers."
Published by Globes [online], Israel business news - www.globes-online.com - on February 14, 2013
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