MK launches Google-protest blimp
MK Yoav Kish and Attorney Guy Ophir take to the skies in order to protest foreign companies not paying the same tax rates as Israeli businesses.
The issue of foreign companies paying a lower tax rate in Israel has been on MK Yoav Kish and attorney Guy Ophir's radars for a while now. Recently, the two came out with an interesting form of protest, launching a blimp outside Google's offices in Israel, baring the writing, "Google must pay tax."
MK Kish (Likud party) is sponsoring a bill that will enforce Israeli tax laws more equally on foreign companies such as Google, Facebook, and Amazon. The bill is meant to deal with the new realities of the internet age, in which many companies who don't have a permanent physical presence in Israel can still make money by selling their services to Israelis, all without having to pay corporate or value-added taxes (VAT) in the country. Ophir, who has been championing this issue for the past three years, claims that this creates an unfair business environment which favors international companies over Israeli ones.
"Their gross and net (income) is the same, unlike (is the case with) the salaries for every one of us – and that's an impossible absurdity," Ophir says, "If this problem Isn't solved, these bodies will continue to gain more and more power, taking over the market."
"We're not talking about companies like Intel, which came here and is receiving investment incentives, but about companies that come into the Israeli market, earn their daily bread in the Israeli market, but don't pay taxes," says MK Kish. "There is a loophole here that allows (these companies) to avoid paying taxes. The sums are hard to estimate, but we're talking about tens or hundreds of millions that could be taken and used to improve the healthcare, welfare, and education fields. It's unacceptable that a small grocer will pay full taxes, while these giants avoid paying millions."
MK Kish says his bill focuses on VAT only at this stage, but that he plans on expanding his efforts towards income tax enforcement in the future. "Because these companies are multi-national," he explains, "Israel is operating under international conventions on matters relating to international taxation – something that is a top OECD priority. But VAT can be collected, since its local, and that's the way to start (this effort)."
If google is forced to pay VAT, would it not transfer that burden to the customer?
"Look, we could say, 'let's cancel taxes for everyone then.' Once someone avoids paying taxes – the burden for everyone else grows. So I say: Let's start collecting VAT, and if we discover there are more taxes – lower the VAT."
"It's unacceptable that one Israeli company would pay and another would avoid (taxes), our intention is that the consumer not pay, but that Google pay the VAT. If we collect the taxes from companies the right way, I hope we can reduce everyone in the future."
Ophir added, "People have to understand the numbers – the losses to the state's treasury from Google alone are about NIS 1 billion a year. That money could be used to raise teachers' salaries by 20 percent, establish a new hospital in (Israel's peripheral areas), and more."
