Bill to raise PM’s salary via tax cut passes 1st reading; could give him NIS 2m

Bill to raise PM’s salary via tax cut passes 1st reading; could give him NIS 2m

Proposal advanced by Knesset could boost Netanyahu’s take-home pay by up to NIS 200,000 a year and retroactively award him more than 10 times as much

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

Prime Minister Benjamin Netanyahu (center) at the weekly government conference at the Prime Minister's Office in Jerusalem on July 1, 2018. (Ohad Zwigenberg/POOL)
Prime Minister Benjamin Netanyahu (center) at the weekly government conference at the Prime Minister's Office in Jerusalem on July 1, 2018. (Ohad Zwigenberg/POOL)

Legislation that would exempt the prime minister from paying taxes on certain assets passed its first reading in the Knesset in the early hours of Tuesday morning.

The bill, which passed with a majority of 32 to 20, requires two further ballots to become law.

The legislation, authored by Likud MK Miki Zohar, who is considered a loyalist to Prime Minister Benjamin Netanyahu, would provide the prime minister 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.

Speaking ahead of the vote, Zohar asked: “Is it conceivable that the president receives such a benefit and the prime minister does not?”

Likud MK Miki Zohar speaks during an Interior Affairs Committee meeting at the Knesset, in Jerusalem, February 20, 2018. (Yonatan Sindel/Flash90)

Zohar told the assembled lawmakers to “try to put populism aside, deal with substance and vote for this law. The prime minister of Israel must earn a fair salary, no matter who he is.”

He claimed that the bill was not created for the benefit of Netanyahu but for the good of future prime ministers.

“People forget that after this prime minister will come others and they will not be able to live with this salary,” he said from the Knesset podium in an apparent reference to Netanyahu being Israel’s most wealthy Knesset member. In 2015, Forbes magazine estimated Netanyahu’s net worth to be NIS 42 million ($11 million).

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

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.

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 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.

Both the tax rebate and the expenses could therefore reach up to an additional NIS 200,000 a year.

The current text of the bill states that the additional funds would be awarded retroactively for the incumbent prime minister, meaning that if passed, Netanyahu could be given a lump sum of over NIS 2 million.

In order to value the exact amount of money that Netanyahu would be eligible for under the law, The Times of Israel has filed a Freedom of Information petition with the Prime Minister’s Office requesting his pay slips and expenses for the last nine years. The PMO has yet to respond to the request.

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 week 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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