The Israel Tax Authority will not postpone tax payments for businesses that pay VAT every month starting in April 23, Tax Authority director general Eran Yaacov said today at a meeting of the Knesset Finance Committee. "There is no reason for this postponement. I think that it is not right, because it is a long time from now, and keep in mind that in the end, these taxes pay for a large part of the economy, and there are quite a few companies that have more taxes at this time," he said. As for advances, Yaacov said that the accountant or lawyer representing the taxpayer can reduce them independently. "Beyond the general postponements, someone finding it difficult to pay every month and wants to spread the payments out can make a request, and it will be examined separately for each case." Yaacov added that payment of labor grants (negative income tax) would be brought forward to June.
Yaacov added that dates for filing reports and tax adjustments had been postponed, and fines had been canceled. As for extending the purchase and betterment tax exemption on for housing owners who sold their housing units, Yaacov said, "This will be considered; it incurs difficult expenses. Someone doing an exchange has eighteen months and if someone waited until the last minute, that has nothing to do with the coronavirus."
Institute of Certified Public Accountants in Israel president Yossi Elisha said in response, "People aren't waiting until the last minute to sell an apartment. It is a step with no cost. Anyone doing land deals has no delay of one day, although the offices are closed, and no one is guaranteed that there won't be any fines." Yaacov answered him, "There is no reason to postpone the reporting date for land deals." Elisha cited a number of instruments that he thought could increase state revenue in creative ways, including compromises in debt disputes heard in court, deducting back losses, and lowering taxes on withdrawing dividends.
Yaacov said that the Tax Authority opposed the proposal for amalgamating the tax years 2019 and 2020, and declared that this measure would have very great consequences. He added, "The remedies provided in the plan two days from now will offer a very broad response. I think that it will be a good solution, and it contains grants for small and medium-sized businesses. Businesses are in a tough period, and we understand that very well."
According to Eran, the plan presented to the prime minister has three elements: a social safety net for businesses, ensuring business continuity, and a strategy for escaping the crises and accelerating growth.
"Tax money is what makes it possible to finance the health system's expenses, and we need a very substantial mutual commitment to get through this thing, which we really don't know when it will end. It could continue for a very long time."
Finance Committee chairman MK Oded Forer (Yisrael Beitenu) told Yaacov, "The uncertainty prevailing among accountants and tax advisers is huge. Issuing a press release isn't enough."
Commenting on the reports of banks raising the mortgage interest rates at the end of the month, MK Orit Farkash-Hacohen (Israel Resilience) said, "Raising interest rates for the public at such a time is unacceptable. The banks' stability is not at risk. It is unacceptable for the government to be providing billions of shekels in guarantees without this having any effect."
Published by Globes, Israel business news - en.globes.co.il - on March 29, 2020
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