Lapid to scrap plan to reduce companies tax

Finance Minister Yair Lapid won't reduce companies tax within the Law for the Encouragement of Capital Investment.

"Globes' campaign against the Law for the Encouragement of Capital Investment has borne fruit: Minister of Finance Yair Lapid today decided to reduce tax breaks for companies within the framework of the Law for the Encouragement of Capital Investment, sources inform "Globes."

Lapid has decided that companies tax for companies in the center of the country will be 15%, the current rate, and will not fall to 12% as planned, and the tax that will be paid by companies in the periphery will rise to 10%. The rates will only apply to new companies receiving tax incentives as it is not possible to retroactively change the tax rates.

In contrast to his predecessor Yuval Steinitz who enthusiastically supported reductions in companies tax as part of the Law for the Encouragement of Capital Investment, Lapid opposes the gap between the current 25% companies tax and the tax breaks which were expected to fall to 12%.

Earlier today Lapid said,"This is infuriating, it is wrong, the public is furious, and so am I," in response to the Ministry of Finance's State Revenues Administration report on the huge tax breaks granted to large corporations.

Speaking at a Yesh Atid party meeting in the Knesset, Lapid said, "It should be remembered that we are not talking about some amendment passed in the dark, but a law passed by the Knesset. Legally, the law is valid for at least ten years. We will change this law. I have sought legal advice, we will open dialogue with these companies, we have a common interest, and we will change the rules of the game consensually."

As for aggressive tax planning, Lapid said, "We're going to places where no one has dared to go before. I am not anti-business, I am no socialist, but the game must be fair. That is the job of the state."

Lapid said that he would submit the budget to the cabinet ministers tonight. "Let the festival begin. Every minister will declare himself a disaster zone, and that's OK," he said.

Published by Globes [online], Israel business news - - on May 6, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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