MKs okay retroactive tax benefits for Netanyahu worth hundreds of thousands

Controversial vote passes in absence of lawmakers from Blue and White; critics blast ‘delusional’ decision at time of economic hardship due to pandemic

Prime Minister Benjamin Netanyahu attends a cabinet meeting at Chagall State Hall in the Knesset on May 24, 2020. (Abir Sultan/Pool/AFP)
Prime Minister Benjamin Netanyahu attends a cabinet meeting at Chagall State Hall in the Knesset on May 24, 2020. (Abir Sultan/Pool/AFP)

The Knesset Finance Committee on Tuesday voted to approve controversial retroactive tax benefits worth hundreds of thousands of shekels for Prime Minister Benjamin Netanyahu.

The measure passed 8-5, with one abstention from opposition Yamina MK Bezalel Smotrich who protested the “unfortunate timing” of the vote.

Lawmakers from the Blue and White party, partners in the prime minister’s coalition, did not vote.

The party was reportedly caught unawares by a clause added by Likud in the draft proposal of the unity deal sent to the committee, which stated 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 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 or allowance, with Channel 12 noting that this could potentially include taxation on profits he made from stock trading and other private ventures.

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

Netanyahu ally MK Miki Zohar told the committee that the taxes would have left the prime minister, who last year the Israel edition of Forbes magazine estimated to be worth NIS 50 million (approximately $14 million), “financially crippled.”

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

Meretz MK Tamar Zandberg in Jerusalem, August 22, 2019. (Yonatan Sindel/Flash90)

Opposition leader Yair Lapid of the Yesh Atid party slammed the move, saying that “while businesses collapse and hundreds of thousands of people are unemployed, the Knesset Finance Committee deals with one thing: tax benefits for Bibi.”

Responding to the vote, Meretz MK Tamar Zandberg said, “Never has any decision seemed so detached, impudent and delusional as a tax benefit to a prime minister accused of bribery while a million unemployed people do not know if they will return to work.”

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 pertain to the period prior to the passage of that legislation.

Likud previously responded to reports about the Netanyahu tax clause by saying that the prime minister was not asking for anything that had not been granted to previous holders of the office.

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

“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.”

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.

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