The Rabinovitch committee today presented an amended version of its tax reform proposal to the Knesset's Finance Committee.

The new proposal contains about 100 corrections compared with the original version. Many of the corrections are technical in nature.

Panel member Dr Avi Alter, a taxation consultant, confirmed that there were many corrections. Unless the reform makes it through Knesset before summer recess, he added, it could fall through entirely. It might get torpedoed next year, because it is an election year, he pointed out.

There was scoffing in legal circles today, saying that the panel had made a joke of the process: "There is no way a serious debate can be held on the dozens of changes the panel introduced," said one source.

Among the corrections:

1. Proposed tax on mutual fund gains was lowered from 25% to 15% (today, it is zero). Dividends will be distributed twice a year, at which time the tax will be imposed. Tax rates will be specific to the investment vehicle (different investment vehicles will be taxed at different rates).

2. New rules were set regarding the establishment of Israeli companies by foreign residents for tax evasion purposes.

3. The definition of a "foreign deposit" was expanded, to include savings accounts and bonds.

4. Tax on Israeli securities traded in foreign markets will be the same for industrial and non-industrial companies.

5. The regulations governing distribution of dividends by foreign companies were eased, in order to encourage investment in Israel.

6. The rules for offsetting losses were made more liberal.