The so-called “Milchan Law” – a tax break for new immigrants with earnings abroad, made headlines this past week as part of Case 1000, in which police allege that Prime Minister Benjamin Netanyahu accepted bribes from Israeli Hollywood producer Arnon Milchan – and Zionist Union MK Yossi Yonah wants to cancel it.
Yonah introduced a bill on Monday that would cancel the law, also known as Amendment 168 to the Tax Ordinance, which exempts new immigrants and returning citizens from paying tax on or reporting income from abroad for 10 years.
According to the police summary of its investigation, Netanyahu asked then-finance minister Yair Lapid to extend the tax provision to 20 years, apparently to help Milchan, who is friends with both politicians.
Yonah called the law a “recipe for corruption” that “turned Israel into a tax haven and detracts hundreds of millions of shekels from the state’s coffers each year.”
According to Yonah, the tax exemption did not help Israel’s economy and “only allowed tycoons to avoid paying taxes and hide their sources of income from the tax authorities.”
The MK cited a 2014 State Comptroller’s Report, which warned that the tax break attracts Jewish criminals to move here and makes it difficult to fight money laundering.
“The police investigations in Case 1000 clearly exposed how Arnon Milchan and others received millions in tax breaks, and the apparently criminal attempt by Prime Minister Netanyahu, which did not succeed, to extend the law granting benefits,” Yonah said.