At the GoForEurope convention this morning, Prime Minister Ariel Sharon said that Israeli investors in hi-tech should receive the same tax exemptions that foreign investors receive.

This is the first time that the PM has publicly supported such a position.

In September the treasury exempted foreign investors from tax on gains made in venture capital investments, in order to prevent capital flight.

Sharon said he had discussed a tax break for locals with Shalom, given the difficulties Israeli companies have met in raising foreign capital. Sharon added that he hopes more domestic investments will encourage foreigners to expand their investments.