Shalom to announce new tax reform committee

Finance Minister Silvan Shalom in an interview yesterday to Channel 2 television said he would announce a tax reform committee in the next few days, which will present its ideas to the minister within 90 days.

He said the committee would operate under few restrictions, and its recommendations regarding capital gains tax would also be considered. Shalom said he would accept the committee's recommendations, though he cannot commit to the time it would take to implement them.

When asked why he did not adopt the Ben Bassat reform, or sections thereof, he said 94% of the public objected to this reform, and that it would not be accepted today either. The minister did agree the tax burden in Israel was high and needed to be lowered.

He also spoke of a possible interest rate hike by the Bank of Israel, and said such a move would make things worse, as he believes long-term interest must be lowered further. The minister spoke in favor of the budget as it was passed in the Knesset this week, and said this is good news for the market and could encourage growth and employment. He agreed that a firmer Knesset could generate better budget appropriation.

Shalom pointed out the religious sector did not receive any additions to the budget of last year, contrary to the impression that was created as if the religious sector squeezed the ministry dry during the budget debates. "We transferred monies due to the religious sector to the base budget. The sector did not get 10 agorot more than it had last year," said Shalom.