Blindsided by PM’s tax benefits clause, Gantz mulls whether to fight it – report

Blindsided by PM’s tax benefits clause, Gantz mulls whether to fight it – report

Blue and White, Likud said trying to reach deal on element of unity deal that grants Netanyahu retroactive tax benefits, as Knesset Finance Committee set to consider it

Defense Minister Benny Gantz attends a cabinet meeting of the new government at Chagall State Hall in the Knesset in Jerusalem on May 24, 2020. (Abir Sultan/ Pool/ AFP)
Defense Minister Benny Gantz attends a cabinet meeting of the new government at Chagall State Hall in the Knesset in Jerusalem on May 24, 2020. (Abir Sultan/ Pool/ AFP)

Blue and White and Likud were holding discussions Monday night on an initiative by the latter party that would see Prime Minister Benjamin Netanyahu get far-reaching retroactive tax benefits worth hundreds of thousands of shekels, Channel 12 reported Monday.

The Finance Committee will on Tuesday review various clauses of the unity deal between Netanyahu and Blue and White party chief Benny Gantz relating to the status of the prime minister and the alternate prime minister.

Blue and White was reportedly caught unawares by the clause added by Likud in the draft proposal sent to the committee, which states that “income tax imposed on the prime minister between January 1, 2009 and December 31, 2017 for income derived from payments, services and benefits, outside of salary and stipends, will be at the expense of the state treasury.”

The benefits would cover the cost of income tax Netanyahu owes, due to upgrades to his vehicle, renovations at his private home in Caesarea, and other expenses dating back to 2009.

The clause effectively means Netanyahu will be absolved of all taxes not related to his salary, with Channel 12 noting that this could potentially include taxation on profits he made from stock trading and other private ventures.

The unity government has faced criticism for placing additional financial burdens on the state at a time when the economy is struggling, due to the impact of the coronavirus outbreak and lockdown measures aimed at stopping its spread.

In 2018, the Knesset passed legislation that absolves the prime minister of taxes for many of his private expenses. The law gave Netanyahu, one of the wealthiest lawmakers in the Knesset, an effective raise of NIS 200,000 per year.

The latest legislative clauses would attend to the period prior to the passage of that bill.

Now, Blue and White is considering whether it is worth clashing with the prime minister’s party over the matter — potentially creating another crisis for the fledgling coalition — or whether to let it go, at the risk of taking a beating in public opinion, the report said.

One proposal being reviewed by the parties would allow Netanyahu’s tax break to go through, in return for halting various benefits for the post of alternate prime minister — benefits Gantz is uninterested in and which would also be withheld from Netanyahu when he presumably assumes the post at the end of 2021.

Former Israeli Prime Minister Benjamin Netanyahu listens to a reporter’s question after his talks with French President Nicolas Sarkozy at the Elysee Palace in Paris, December 18, 2008. (AP Photo/Jacques Brinon/File)

Those include a team of workers to staff an official residence, expenses relating to the property itself and its maintenance, hosting expenses, and economic benefits for family members who live with him.

Gantz already said Sunday that he was waiving the right to an official residence granted to him as alternate prime minister and would continue to live at his private home. He has also said he is uninterested in the other perks offered to him.

Likud responded to reports about the Netanyahu tax clause by saying that Netanyahu was not asking for anything that had not been granted to previous prime ministers.

“The prime minister is not asking for any special terms,” the party said in a statement. “The Finance Committee will require Netanyahu to pay tax exactly like previous prime ministers. There was an outrageous and personal attempt to charge Netanyahu with tax that was not required of any other prime minister. There will not be one law for Netanyahu and another for the previous prime ministers.”

Prime Minister Benjamin Netanyahu’s private residence in Caesarea. (Screen capture: Channel 10)

However, The Marker newspaper noted that such issues are not believed to have come up at all for previous prime ministers, as they never made such funding demands from the state for private residences, certainly not at the scope of Netanyahu’s requests.

Likud also denied that Netanyahu would seek reimbursement for taxes he paid on private investments, such as stocks, and insisted that the tax benefits would only relate to expenses he incurred in his duty as prime minister.

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