"Our job is first of all to bring in money, and people forget this," said Israel Tax Authority real estate taxes division head Shay Aharonovich at the Israel Builders Association's annual conference at the Herod's Hotel in Eilat today.
"We are a conservative body, which knows what the real estate tax revenues are, and we know that every exemption and break will reduce revenues. We fought against the diamond merchants, but what can you do when a merchant can get up and go to Belgium or India. But real estate is a bit harder to take to another country. What can you do when there is a NIS 40 billion deficit. A Ministry of Finance official called and asked me how many apartments change hands and I told him, 30,000. So he immediately multiplied that by 3.5% to be collected through the purchase tax, and the Ministry of Finance has found another NIS 1 billion for the hole."
The Tax Authority clarified, "Aharonivich mentioned one telephone conversation, which was part of regular wide-ranging staff work carried out at the Ministry of Finance and Tax Authority before making a decision on the matter.
New Ministry of Housing and Construction director general Shlomo Ben-Eliahu said in response, "You don’t take money when the market is hottest, from a place which automatically raises the price of the product. In a second, you raise the price of apartments by 4.5%. The money shouldn’t be taken from a place that is on fire, because you're adding fuel to the fire. Yes, you need money to cover the deficit, but you're taking it from the wrong place."
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2013
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