The Knesset Finance Committee today held the continuation of a hearing regarding assistance to the restaurant and event hall industry in light of recent escalations in the south of the country.
Last week, the committee called on the Treasury to arrange compensation for these industries as soon as possible, and that, if no response is provided to it in secondary legislation, the committee will initiate legislation similar to other compensation packages.
In the absence of a solution from the Tax Authority, committee Chairwoman Adv. Sagit Afik introduced a bill that would include restaurants and event halls in the Property Tax Law and Compensation Fund. This means that whenever ad hoc provisions for compensation to businesses in the South are introduced, compensation will also be given to restaurants.
In addition, the bill includes a provisional directive that begins retroactively from May anchoring compensation to these industries in the amount of up to NIS 5 million to be distributed according to eligibility guidelines.
During the discussion, business owners called on the committee to provide a solution, otherwise they would collapse, just like other businesses in these industries.
Committee Chairman MK Moshe Gafni (UTJ) opened the discussion: "I asked the Tax Authority for answers to the Gaza area issue. They should give money. A normal and orderly country should pay."
Tax Authority Deputy Director Miri Savyon said, "We haven't been able to find a solution in this way. Even around the specific events, it's clear that there are businesses that have been severely affected but there are also some that weren't. The regulations come to compensate those who have been significantly affected, so we haven't been able to consolidate at this time a common solution that would apply to this event. The existing legislation cannot be implemented in this case, it must be applied in detail to the data and this cannot be done at this time. "
Committee Chairwoman Sagit Afik said that "we left the banquet halls and restaurants outside of the provisional regulations, because you said you prefer a permanent directive."
Tax Authority Compensation Department Director Amir Dahan explained: "We took May 2018, when there was massive missile fire - 700 missiles, and compared it to May in 2017, we took about 50 businesses from these industries, in the 0-7 range, and on a general level there is no decrease in turnover. Twelve businesses saw significant growth in turnover, 21 businesses stood between 6 percent growth and 6 percent decline. 19 businesses were above 6 percent decline. For us, this isn't a significant figure."
Business owners were outraged following the Tax Authority's position. Georgie Okart, a restaurateur, said "I feel the Tax Authority is throwing sand in the eyes of the committee. I dropped half a million shekels a year. We started this whole discussion from a point that between 3 and 5 million were approved. They're diverting the discussion and taking their time."
Aviv Shaziri, who owns an event hall, said: "The Tax Authority people don't live in the same country as me. I have reduced income, I've taken loans. To date, 12 weddings have been canceled; who will compensate me? Halls have closed, I'm next in line to close. I ask for compensation for every event you close for me, that the State instructed me not to hold."
MK Gafni said "We all agree that there's harm to the restaurants and the banqueting halls, your argument is that the percentage is not high. So let's take that percentage and set criteria for whoever qualifies for compensation, and whoever doesn't, won't be eligible."
MK Avi Nissenkorn of Blue and White said: "There are residents and business owners here who are getting no response from the State of Israel. We need to address social resilience. If 33 percent should receive compensation, according to your data, then it should be given to them. The law should be passed. I ask that we move forward with legislation, with an exemption."
MK Michal Shir of the Likud said "The resilience of business in the south is the resilience of us all. This is what will determine whether or not we win this war. If business is successful and people are happy and things are good, then we win. If business collapses, we lost directly. NIS 5 million for national resilience. They need to flourish for the State to flourish."
MK Gafni: "It's become impossible, so we have no choice but to introduce a bill now. We will introduce it, and at every stage we'll be aware of what you tell us, if you can go to secondary legislation. Because according to your presentation, you won't pay anyone. I sat down with the Finance Minister and the Interior Minister, and everyone thought they should have taken 3 million compensation. The Treasury Spokesman explained to us that the law does not allow this. Legislation can overcome this."
Finance Committee Chairwoman Adv. Sagit Afik stated: "The bill consists of 2 parts, one part is a permanent amendment, introducing restaurant and event halls into the property tax law and compensation fund. It means that every time provisional instructions are brought, these branches of industry will also be included. The second part is a provisional instruction that begins retroactively in May, as it was brought in tourism. We determine that they are entitled to compensation as of May, and the amount will be limited to NIS 5 million, and will be distributed."
The committee Chairwoman concluded the discussion: "We want to promote swift legislation. Ministers I've been talking to support the solution, unless the Tax Authority wakes up and says it wants to move forward with secondary legislation, we want that and we don't accept your explanations. Otherwise, we'll go for quick legislation. We'll come and we can look the business owners in the eye, and tell them - the State isn't abandoning you."