Israeli Leaders Debate Tax Reform and Economic Policy at Eilat Conference
Leaders discussed the controversial trapped profits tax and economic strategies at the Tax Advisers Chamber conference in Eilat, focusing on growth and taxation.
The annual tax conference of the Tax Advisers Chamber opened in Eilat yesterday, bringing together hundreds of tax professionals and Tax Authority officials. During the opening evening, a video was broadcast in which Chamber President Yaron Gindi interviewed Energy Minister Eli Cohen, MK Avigdor Lieberman, Naftali Bennett, and Shaul Meridor.
Gindi presented the controversial issue of the current and trapped profits law, which also impacts the real estate market. The mechanism aims to tax undistributed corporate profits, with estimates suggesting some companies will divert funds away from commercial real estate. Gindi noted that the law imposes a 2% annual penalty on undistributed profits, which harms investors holding commercial properties.
Positions on the Tax Law
Naftali Bennett responded to the criticisms by stating: > "We will look to soften this. I cannot promise here that we will cancel the law immediately, because I must see the overall picture — canceling the law will lead to revenue loss and I must act responsibly."
In turn, MK Avigdor Lieberman emphasized that there should be no tax hikes, arguing instead for cutting coalition funds and closing unnecessary government ministries to address the surging defense budget.
Economic Strategy and Bureaucracy
Discussing bureaucratic burdens, Naftali Bennett noted that excessive regulation stifles the private sector. He stressed the importance of tracking key performance indicators to cut red tape effectively, while panel participants agreed on the necessity of supporting high-tech and research sectors.
