"I came to the conclusion that it would be right at this time of political instability to prevent further shocks."
This evening, Minister of Finance Ronnie Bar-On announced that he was withdrawing his controversial plan for tax reform and taxation of advanced training funds, which are essentially a channel for tax-free savings. The Histadrut (General Federation of Labor in Israel) had threatened strikes in protest against the proposal to tax the training funds.
Bar-On said, "Out of a sense of personal responsibility for the situation of the economy and for preservation of its stability I came to the conclusion that it would be right, at this time of political instability, to prevent further shocks from strikes and unsettled labor relations."
Bar-On added, "I erred in the timing and in my political assessment that it would be possible to push through the plan in its entirety, despite its controversial elements. I believed that it would be possible to gain acceptance for the plan through dialogue. We will examine the question of the scope for tax cuts in the long term in the absence of sources and in the light of the political situation. We have complicated challenges facing us we must continue to maintain economic stability and to conduct economic policy responsibly despite the political instability.
Published by Globes [online], Israel business news - www.globes.co.il - on June 25, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008