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"Marriage Fine” to be Cancelled

Finance Minister will scrap unified tax calculation for married couples working in the same business.
By Gil Ronen
First Publish: 8/8/2013, 3:27 PM

Businesswoman (file)
Businesswoman (file)
Flash 90

Finance Minister Yair Lapid said Wednesday that he will act to cancel the unified tax calculation for married couples who work in the same business. The tax has been dubbed the “marriage fine” by its opponents, who say that it actually provides an incentive for divorce among couples who work together in a family business.

Lapid has instructed the Director of the Tax Authority, Moshe Asher, to advance the legislation of a bill to cancel unified tax calculation in family businesses, so that it goes into force by January 1, 2014.

This means that husband and wife will each have their taxes calculated separately, according to their individual earnings, no matter how much they earn.

Married couples working in the same business currently can opt for separate tax returns only if they earn less than NIS 50,000 annually. The new bill will cancel this limitation – making it possible for both partners to enjoy various tax benefits.

Lapid said that the decision is “a direct continuation of the policy that places the working person at the center of our work, as well as incentivization of participating in the workforce, which will increase market productivity.”

"I am glad that we were able to stop an old market aberration that prevented the growth of family businesses – most of them small and medium sized businesses, which are the central backbone of Israel's business world.”

MK Moshe Feiglin (Likud) was quick to congratulate the minister for the decision, calling it “an important milestone in the work of the Knesset Lobby for Strengthening Family and Community Structure, which I head.”

MK Feiglin noted that the “marriage fine” was one of the subjects discussed in the first conference of the Lobby. “I am glad that the message, which was also relayed to the minister in a private conversation – reached its mark,” he said. "I see this as a first step by the government of Israel in the right direction of strengthening the family unit, and I will continue to act to strengthen this trend.”

MK Feiglin said at the May 1 conference that there were powerful forces at work in Israel against the very concept of family. he noted that no other Knesset members came to the conference, and said that this was directly related to the clout wielded by the "anti-family" forces.