The founder of one of Israel’s most successful tech unicorns declared on Tuesday that he was leaving the country and ceasing to pay taxes in protest over the new hardline government’s planned judicial overhaul.
Verbit CEO Tom Livne, whose hybrid AI-based and human transcription and captioning software company was valued at $2 billion in its last funding round in late 2021, told Channel 12 that he encouraged other prominent tech executives to follow his lead.
“Over the past few years, I’ve paid tens of millions of dollars in taxes and my company has paid hundreds of millions in taxes,” he said.
Explaining the rationale behind his far-reaching decision, Livne said, that when members of the tech sector, “as the engine of the economy, start talking and acting like this, then they’ll come to the table and talk to us as equals.”
“I hope [others] will see me doing this and follow my lead… to stop residing in Israel and to stop paying taxes. This is the solution and one that will hurt [the government] the most,” he added.
Livne, whose company employs some 200 workers in Israel and roughly 1,000 abroad, told Channel 12 he has already begun withholding investments in the Israeli economy.
Founded in 2017, Verbit’s transcription services are used by more than 2,000 customers across the legal, media, education, government, and corporate sectors, including CNBC, CNN, FOX, Harvard University, Stanford University, and Kaltura, according to the company.
Finance Minister Bezalel Smotrich of the far-right Religious Zionism party responded to Liven’s announcement on Twitter, telling him “we are brothers” and “hope you come back.”
“We do not have another land and another people and another country. In any case, we promise with God’s help, to keep Israel Jewish and democratic, strong and economically prosperous, so that you and every Jew will always have a home to return to,” said the minister, a key member of Prime Minister Benjamin Netanyahu’s hardline government coalition.
Last week, the co-founder and CEO of global payroll company Papaya, also a tech unicorn worth over $1 billion, said the company would “withdraw all of the company’s funds from Israel.”
“There is no certainty that we can conduct international economic activity from Israel,” Eynat Guez wrote on Twitter. “This is a painful but necessary business step.”
Founders, executives and workers in Israel’s celebrated tech sector have voiced strong opposition to the proposed judicial shake-up put forward by Justice Minister Yariv Levin to radically limit the High Court’s independent powers.
The legislative changes would severely restrict the High Court’s capacity to strike down laws and government decisions, with an “override clause” enabling the Knesset to re-legislate struck-down laws with a bare majority of 61; give the government complete control over the selection of judges; prevent the court from using a test of “reasonableness” to judge legislation and government decisions; and allow ministers to appoint their own legal advisers, instead of getting counsel from advisers operating under the aegis of the Justice Ministry.
Israeli companies, moneymakers, and business organizations have been stepping up efforts in recent weeks to voice concern over the judicial overhaul plan, which they say threatens democracy and will harm the thriving local tech industry. Many fear that a weakening of the judiciary system will create uncertainty and reduce the likelihood that foreign investors will inject funds into companies here. This in turn could force local and international businesses to leave and set up shop elsewhere.
Growing investor jitters over the judicial changes on Sunday pushed Israeli stock indices down by more than 2% and government bond prices dropped, while the shekel lost 2.9% of its value against the dollar in the last week of January.
Livne’s interview aired hours after hundreds of tech workers staged demonstrations in major Israeli cities for the second week in a row to protest the planned efforts.