Rabinovitch tax reform committee chairman Yair Rabinovitch said today upon submitting its recommendations to Minister of Finance Silvan Shalom that special interests in the capital market wanted to foil the taxes on the Tel Aviv Stock Exchange (TASE), especially the sales tax.
"There have always been, and always will be, special interests that will try to prevent tax and capital market reform. These interests are making threats over the sales tax. We should not be deterred by them," he said.
Rabinovitch rejected criticism, especially by members of the Ben-Bassat committee, that his committee evaded difficult and important issues, such as taxes on inheritances, advanced training funds and provident funds.
"The committee did not evade the difficult issues. We preferred avoiding marginal matters that might have made a bigger media splash. The committee had to avoid marginal matters that might have ruined its work. That wasn't evasiveness, but focusing on the really important issues," he said.
Rabinovitch also rejected criticism that the committee's recommendations will undermine market stability even further and hurt the weaker segments of the population. "The critics are wrong. The reform will serve the little man, especially at a time of severe economic crisis. The real winner will be the Israeli economy," he said.
He made it clear that there was no intention to use the capital gains tax to finance the budget deficit. To the contrary: the state budget would contribute over NIS 1 billion to reduce the tax burden on labor.
Rabinovitch noted that the tax burden on the middle class has until now been unreasonable and unbearable, driving productive elements overseas. "Every effort must be made to prevent Israel becoming an exporter of trained and professional manpower. This can be done by reducing the tax burden," Rabinovitch concluded.
Published by Globes [online] - www.globes.co.il - on June 12, 2002