Government approves expediting payments to suppliers

A 2014 report found that two-thirds of government payments to suppliers were late.

By
January 31, 2016 21:59
1 minute read.
A business interview

A business interview. (photo credit: INGIMAGE)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later

The cabinet on Sunday approved a plan to expedite government payments to suppliers, an effort to ease strain on the small and medium suppliers in particular.

The bill would require government ministries to make payments with 30 days of the invoice being received, while local authorities will have half their current 90 days to make payments. Infrastructure projects will have longer payment schedules: 70 days for ministries and 90 for local authorities. Exceptions will apply when the funding source comes from outside the government. Other public bodies, such as government companies and educational institutions, will have a 45-day limit.

Be the first to know - Join our Facebook page.


The government will be forced to pay interest on late payments.

“This is an important law that will benefit businesses, strengthen them, and solve many credit crises for businesses in the country," said Prime Minister Benjamin Netanyahu in his capacity as Economy Minister.

Small and medium businesses, he noted, struggle to get additional credit simply because their vendors take so long to pay them. Since small businesses generally pay high interest on credit, the delayed payment schedule put them at a particular disadvantage against larger companies.

A 2014 report found that two-thirds of government payments to suppliers were late, and many had policies extending to three or four months after the invoice to issue payments. In 2015, it took the government an average of 72 days to make payments.

"Regulating the payment ethic in the economy will allow small businesses to invest their resources in what they need – marketing, product development, and increasing their number of clients," Netanyahu said.

JPOST VIDEOS THAT MIGHT INTEREST YOU:


Finance Minister Moshe Kahlon expressed his hope that when the government leads by example, the private sector will follow suit as well.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

Workers strike outside of the Teva building in Jerusalem, December 2017
December 18, 2017
Workers make explosive threats as massive Teva layoff strikes continue

By MAX SCHINDLER