Bill to boost PM’s annual income by up to 200k shekels green-lit for final votes

Bill to boost PM’s annual income by up to 200k shekels green-lit for final votes

Legislation would exempt Netanyahu from paying taxes on prime ministerial benefits; final version of bill omits previous proposal to award rebate retroactively

Raoul Wootliff is the The Times of Israel's political correspondent.

Prime Minister Benjamin Netanyahu leads the weekly government conference at the Prime Minister's Office in Jerusalem on June 10, 2018. (Yonatan Sindel/Flash90)
Prime Minister Benjamin Netanyahu leads the weekly government conference at the Prime Minister's Office in Jerusalem on June 10, 2018. (Yonatan Sindel/Flash90)

Knesset members on Wednesday gave the go-ahead for final votes on legislation that would exempt the prime minister from paying taxes on certain assets and effectively raise his yearly take-home pay by up to NIS 200,000 ($55,000).

The legislation, authored by Likud MK Miki Zohar, who is considered a loyalist to Prime Minister Benjamin Netanyahu, would provide the premier with “a tax exemption for payments, services and gifts given to him in the framework of his job, excluding his salary,” according to the text of the bill. Specifically, the law would exempt the premier from taxes on his state-issued car and on utility bills paid by the state at his personal home.

If passed into law, Netanyahu would profit by some NIS 8,000 ($2,200) a month in tax rebates, since he currently has to pay around NIS 3,000 in taxes on his car and NIS 5,000 on the residence.

Netanyahu is currently Israel’s most wealthy Knesset member. In 2015, Forbes magazine estimated his net worth to be NIS 42 million ($11 million).

In December the High Court ruled that fees paid by the state for the upkeep of the Netanyahus’ Caesarea property, which is owned by the couple but defined as an official state residence, count as taxable benefits given to a public servant.

Demonstrators near Prime Minister Benjamin Netanyahu’s home in Caesarea, May 25, 2018 (Courtesy)

Netanyahu earns a gross monthly salary of NIS 48,800 ($12,500), according to a pay slip made public by the Prime Minister’s Office in March 2016. After income, national health insurance and social security tax deductions and vehicle expenses, the prime minister’s net monthly income stands at NIS 17,600 ($4,500).

The bill could also add to Netanyahu’s monthly income by allowing him to charge the state for additional expenses at both the Prime Minister’s Residence in Jerusalem and his private home in Caesarea. Those expenses could tally up to a further additional NIS 10,000 a month.

The Tax Authority estimated that the measure would increase the prime minister’s annual salary by up to NIS 200,000 a year.

The final version of the bill omitted a previous proposal that the rebate would awarded retroactively for the incumbent prime minister, meaning that Netanyahu could have be given a lump sum of over NIS 2 million.

Instead, if passed, the law would only act retroactively from January 1, 2018.

The bill comes as the attorney general considers police recommendations to indict Netanyahu for receiving illicit gifts worth up to NIS 1 million, and a month after his wife Sara was charged for misuse of state funds.

Netanyahu’s financial dealings have been the subject of intense public scrutiny and, at times, scathing criticism, amid reports of excessive use of state funds, including NIS 80,000 ($20,000) a year on water at his Caesarea home, a NIS 10,000 ($2,500) monthly budget for ice cream, and a five-hour flight for which he spent NIS 450,000 ($125,000) to have a bed installed in the plane.

Prime Minister Benjamin Netanyahu, right, and his wife Sara in Jerusalem, on May 16, 2018. (Yonatan Sindel/Flash90)

In 2015, a state comptroller report found that expenditures at the prime minister’s residence had been excessive and improper, highlighting exorbitant spending on food, cleaning and clothing among other areas, and that budgetary practices had not been carried out with integrity and transparency.

The comptroller highlighted and criticized, for instance, hundreds of thousands of shekels spent annually on takeout food, even though the residence employed a cook; excessive spending on the couple’s home in Caesarea, even though it was only used on weekends; and the employment of a Likud Central Committee member, Avi Fahima, as a private electrician on the weekends and even on Yom Kippur at the Caesarea home.

Some of those findings formed the basis of a fraud investigation against the prime minister’s wife, Sara Netanyahu, in which she was indicted last month for charging some NIS 359,000 ($100,000) in gourmet meals to the state’s expense between 2010 and 2013, violating laws that ban the ordering of prepared food when a chef is employed at the official residence, according to Attorney General Avichai Mandelblit.

The Netanyahus have denied wrongdoing, calling the indictment “a new height of absurdity.”

At the same time, Mandelblit is also reportedly considering bringing bribery charges against Benjamin Netanyahu in so-called Case 1000, or the gifts case, one of several corruption probes against the premier.

The case, which police handed over to the prosecution in February with recommendations for a bribery charge, involves suspicions that the prime minister and his wife received illicit gifts from billionaire benefactors, including Israel-born Hollywood producer Milchan and Australian resort owner James Packer, in exchange for favors.

Times of Israel staff contributed to this report.

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