‘Red Tape Nation’ Hears Promises Of Reform


Israel proudly wears the crown of “Startup Nation,” but economic leaders acknowledged on Monday that the country is a world leader in red tape as well, and they promised to do something about it.

At the Calcalist Conference for Small and Medium Enterprises in Tel Aviv, Economy and Trade Minister Naftali Bennett said that an average business had to spend 235 hours a month — well over the amount a full-time employee puts in — just coping with regulatory requirements.

According to the World Bank, he said, Israel was ranked 139th in ease of obtaining building permits, behind even such economic nonentities as Algeria, Togo, the Palestinian Authority and Syria.

“Under Assad it takes 104 days to get a building permit. For us it’s 212. Listen, friends, if I were in your shoes, I’d consider moving my business to Damascus,” Bennett, a former high-tech tycoon in his own right, joked.

In another invidious comparison he made, the average OECD country has 12 different kinds of taxes to account for and pay each year; in Israel it’s 33.

Bennett decried environmental regulations that overburden the marketplace. “There are 700 criminal offenses in the environmental field,” he said. “Why do we put this on small and medium businesses?”

Knesset Economics Committee Chairman MK Avishai Braverman (Labor) suggested a revamping of the tax code to make it “simpler” (“like in the United States”) and getting rid of tax breaks for big companies.

MK Nissan Slomianksy, who now chairs the Knesset Finance Committee, argued that Israel’s 450,000 small and medium businesses need more access to credit, saying they only receive NIS 60B of the NIS 415B in business loans banks give out each year.

Earlier in the day, Bank Leumi CEO David Brodet announced the establishment of a NIS 3B fund for small and medium businesses, and promised to make loans available to them within 14 days of application, The Jerusalem Post reported.

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