Gafni slams Treasury over tax grants to doctors

Eighteen months after the end of the long doctors’ strike, in which a major issue was encouraging young physicians to work in the periphery, the Finance Ministry may turn the clock back by putting a 48-percent tax on state grants to those who leave the central region.

The Knesset Finance Committee held a tension-filled session on Tuesday in which chairman Moshe Gafni severely criticized the Treasury for “going back on its word.”

The United Torah Judaism MK expressed his displeasure over the fact that senior officials from the Tax Authority had not appeared at the meeting.

He noted that even if the grants were not tax exempt, the tax rate for such incentive payments was never more than 20% or 25%.

Gafni said he would fight for recognition of the grants as “scholarships,” which are not subject to taxation. A 48% income tax on the grants, he said, violates the spirit of the agreement between the Treasury and the Israel Medical Association, which represents physicians.

He suggested that the tax be either eliminated or lowered, or else that the IMA go to the courts and sue the Treasury for violating an agreement.

He also asked the committee’s legal adviser, who dealt with court matters during the strike, to send the protocol of the discussion to District Court Judge Hila Grestel, who handled a case involving the strike at the time.

Deputy Health Minister Ya’acov Litzman, also from UTJ, said that “for the first time in Israel, doctors prefer to go to the periphery to work, and now the state itself destroys the agreement with its own hands.

The state will cause serious harm to public health, and it will be very difficult to fix it in the future.”

Miri Cohen, an official from the Tax Authority’s legal department, said the authority had not yet decided whether to accept the committee’s recommendations about taxation on the grant.