Big Four Companies Paid Only 3% Tax

Four Israeli corporate giants have been paying shockingly low taxes, according to a Finance Ministry report released on Sunday.

Teva, Intel, Israel Chemicals (ICL) and Checkpoint, though not named in the report, have been paying an effective tax rate of 3 percent, according to a Calcalist analysis.

They are the four largest companies eligible for capital investment tax credits, and received 70 percent of the NIS 5.6b in benefits in 2010, which entitled them to the minuscule rate.

In the seven years covered by the study, which only assessed companies eligible for capital investment benefits, the level of benefits more than doubled, from NIS 2.3b to NIS 5.6, while the corporate tax rate steadily declined from 36 percent to 25 percent, The Jerusalem Post reported.

While the effective tax rate paid out by the lowest ten percent of the eligible companies remained stable at 20.8 percent, the companies in the top decile’s rates fell from 15.2 percent to 10.5 percent, and those in the top percentile’s rates fell from 16 percent to 3.3 percent.

Opposition leader Shelly Yachimovich (Labor) seized on the news as evidence of economic inequality. It exposes a “difficult and totally twisted picture of the distribution of benefits in a reckless and unjustified way to a small group of corporations,” she said.

“In a few weeks, the finance minister will put a heavy VAT on all of the poor and middle-class people, together with budget cuts, while, just like his predecessors, he defends the larger pool from which he can take taxes,” Yachimovich added.

MK Issawi Frej pointed out that Lapid and his party campaigned in the election for equality in the burden of national service, saying there should be equality in the tax burden too.

This article appeared in print on page 7 of the May 6th, 2013 edition of Hamodia.