"The Minister of Finance is brave. We are doing him an injustice," Adv. Moshe Shekel advisor to Yair Lapid on his plan to waive VAT for first time buyers of new homes of up to NIS 1.6 million, told "Globes" today.
Shekel said that the criticism and storm generated by the proposal has for the most part been unjustified, "from the claim that the law creates a differential tax through to the claim that this is a population-sector benefit that will ultimately reach the pockets of contractors, and even the claim that second-hand homebuyers will not benefit. I hear that they are claiming Lapid thinks that this initiative will solve the housing problem. Well, Lapid is not fooling himself and does not think this initiative will solve the housing problem. The housing problem was caused by the conduct of previous governments and cannot be solved in one fell swoop or the stroke of a pen, and it won't take one year or even two but only after a process of increasing supply."
He added, "Meanwhile people can do nothing or like Lapid come along and take a range of measures that might help homebuyers in the short and medium term who need to buy an apartment today."
Lapid's proposal was criticized by former Accountant General Prof. Yaron Zelekha, currently Kiryat Ono Academic College Dean of the Business Administration Faculty. He described the plan as "stupid" and added that it might help supervise prices of new apartments but not the quality of construction and we might find contractors "building homes without floor tiles."
Zelekha also said, "People who don't know the subject should get out while he is ahead."
Shekel rejects these claims and said that it would be better to stay quiet. "There are other subjects in Israel besides VAT, like the Law for Home Sales, which defines the responsibilities of building contractors, so there is nothing in this claim."
On claims that the law creates a differential tax in the market, Shekel said that there is already a large range of products with 0% VAT such as income from apartment rentals, and traveling abroad, and nobody complains about tax differentials.
Published by Globes [online], Israel business news - www.globes-online.com - on March 23, 2014
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