The Supreme Court today ruled that Prime Minister Benjamin Netanyahu would begin paying tax on state-paid expenses on his private home, starting on January 1, 2018. The Supreme Court thereby upheld the state's position that reimbursement for part of the prime minister's home expenses constitutes a taxable benefit.
The ruling was issued following a petition filed by Advocate Shachar Ben-Meir against the tax exemption granted to Netanyahu for benefits that he receives from the state as his employer in his private residence in Caesarea. The state initially sought to have the petition dismissed, pending the conclusions of an inter-ministerial team it planned to establish in order to consider the matter, but the court ruled that the petition would be heard.
Last week, the state notified the Supreme Court that the inter-ministerial team that examined the matter had concluded that the proportion of Netanyahu's home expenses paid by the state constituted a benefit that he received from his employer - the state - and that he should therefore pay tax on it.
The prime minister's domicile expenses have been on the public agenda for a long time. Among other things, it was debated over the past year whether Netanyahu would be taxed for expenses on his private home, following reports that Attorney General Avichai Mandelblit would soon announce the filing of an indictment against the prime minister's wife, Sara Netanyahu, which involves suspicions that she and other parties in the Prime Minister's Office charged the public for private expenses.
The essence of the petition, which was filed in November 2016, is the question of why the prime minister should not pay taxes on benefits he receives from the state as his employer - expenses that are not considered to have been spent as part of his job. Among other things, this involved money paid to maintain his private residence, including sealing, painting, and whitewashing, as well as NIS 1,500 in monthly general household expenses.
In their petition against Netanyahu, Mandelblit, the Prime Minister's Office acountant, and the Israel Tax Authority, Advocates Ben-Meir and Itzhak Aviram asked the court to issue an absolute order instructing the Prime Minister's Office accountant to withhold tax from Netanyahu's salary for private expenses, and to order the Tax Authority to collect tax from Netanyahu on the benefit of payment for private expenses in his private residence.
"If the petitioner pays tax, and if all the other citizens in the country pay tax, why should this not apply to the head of the executive branch, a public figure with the highest position and rank of all taxpayers?", the petition asks.
The petition argues that the tax exemption granted violates the principle of equality. "Can the highest executive position in the country receive extraordinary benefits that no one else receives, and which do not exist in law? The principle of equality should be scrupulously applied to the mighty," the petitioners wrote.
Published by Globes [online], Israel Business News - www.globes-online.com - on December 27, 2017
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