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Ahead of early budget fight, Shaked plans to streamline small business regulations

Expected to be signed into effect in 2 weeks, interior minister and MK Abir Kara’s amendment to Business Licensing Order eases up on bureaucratic requirements

Carrie Keller-Lynn is a political and legal correspondent for The Times of Israel

Interior Minister Ayelet Shaked (R) and fellow Yamina MK Abir Kara present their plan to reduce the bureaucratic burden on small businesses, May 1, 2022. (Mark Neiman/GPO)
Interior Minister Ayelet Shaked (R) and fellow Yamina MK Abir Kara present their plan to reduce the bureaucratic burden on small businesses, May 1, 2022. (Mark Neiman/GPO)

Interior Minister Ayelet Shaked and fellow Yamina MK Abir Kara on Sunday presented an amendment to the Business Licensing Order that would ease regulatory burdens on about a third of Israeli businesses. Shaked expects to sign it in two weeks.

Using a stack of office binders as props, Shaked and Kara detailed how the amendment could reduce the need for thousands of Israeli businesses to obtain licenses, as well as eliminate the need for police approval for certain leisure businesses such as restaurants, cafes and bars.

Shaked touted the changes as “significant easing of regulations that will affect tens of thousands of businesses.”

“When I entered my position at the Interior Ministry, one of the most important goals I set for the ministry’s staff was to reduce regulation and remove barriers in order to make it easier for small businesses that are forced to meet unnecessary requirements under the wheels of debilitating bureaucracy,” she added.

Kara, a business owner who has long championed measures to support self-employed and entrepreneurial Israelis, said that the amendment is “another huge step on the way to a freer market.”

Interior Minister Ayelet Shaked (L) and fellow Yamina MK Abir Kara present their plan to reduce the bureaucratic burden on small businesses, May 1, 2022. (Mark Neiman/GPO)

“As entrepreneurs, we have always felt that the state is trying to defeat us and place obstacles on the ‘runway,'” he said.

Connecting the measure to Israel’s rising cost of living, he argued that “the move will make it easier for business owners, remove regulatory burdens from them, and as a result prices will fall.”

The reform, according to figures calculated by the politicians’ working team, would apply to 44,052 businesses. The two calculated the amendment’s fee-related savings at NIS 436 million ($130 million) and about 3.8 million total working days saved in wait times for licenses.

These aggregate savings stretch across the five areas covered by the amendment: imports, food production, leisure businesses, removal of unnecessary licenses and longer license validity periods.

Food, toiletry, and medical preparation importers and small food manufacturers will no longer have to register for a separate business license in order to operate, but rather can rely on the other licenses already required of them, such as import and manufacturing licenses.

Leisure businesses, like restaurants and bars, will no longer need to apply for police approval to regulate their alcohol sales.

Meanwhile, certain industries will automatically see their licenses extended, including pools, hotels and nightclubs.

Yellow vest protesters against rising cost of living, outside Ikea in Rishon Lezion, February 2, 2022. (Avshalom Sassoni/Flash90)

Not requiring legislation or approval by a Knesset committee, the changes will go into effect once signed by Shaked, a move expected on May 17.

A senior adviser within Yamina said the planned amendment was being made as part of the process to get ministerial budgets in order in anticipation of an early push to pass the 2023 state budget.

The embattled coalition — floating along since April 6 in a 60-60 seat deadlock with the opposition — is widely expected to try to pass the 2023 and possibly the 2024 budget in the upcoming summer session, which starts next week.

Should the coalition succeed in passing the budget, it would buy Naftali Bennett’s government time even if it loses additional coalition members (so long as the Benjamin Netanyahu-led 54-seat bloc of the opposition cannot muster 61 votes to topple it in a vote of no-confidence).

If the government were to limp along at a voting impasse into next year, failure to pass a state budget in 2023 is a government-dissolving fail switch that the Bennett and Yair Lapid-led coalition seeks to avoid.

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