While public outrage has yet to abate over revelations of huge tax breaks given to major companies in Israel in recent years, the Knesset Finance Committee has approved a plan to give tax breaks to exporters, Globes reports.
Under the Encouragement of Capital Investment Law reduced tax rates will be offered to companies that export at least 25% of their production.
Instead of paying the standard corporate tax rate — due to rise from 25% to 26.5% next year — qualifying companies in the center of the country will pay 15% tax, while those in outlying areas will pay 9%.
In practice, however, the new plan is expected to generate more in corporate taxes next year than the current law, which dates from 2011. In the longer term, after the expiration of other currently available tax breaks, the new scheme is expected to garner an additional NIS 600 million more annually than present laws.
The plan was worked out by the Finance Ministry in consultation with representatives of the Manufacturers Association.
Some of the country’s largest corporations currently pay just a few percent of their income in tax, and, in some cases, no tax at all. Finance Ministry officials say that is being phased out over the next few years.