(photo credit: courtesy)
A public dispute has arisen over the licensing of tax advisors in Israel. The
topic is of interest and touches on the important larger questions of freedom of
occupation versus advancement of professional standards.
All tax advisors
are required to pass a demanding set of exams. In addition, there has been a
requirement for attendance at an authorized college or passing the bagrut
Recently, the Tax Advisors Council, which is the
official body setting professional standards, made a decision to cancel
requirement for bagrut.
The objective was to make entrance to the
profession easier for haredim, particularly haredi women, most of whom
take the exams.
This decision prompted a lawsuit from the Tax Advisor’s
Association, the recognized professional association. They claimed that
decision was marred by severe procedural shortcomings, in effect
the association’s representatives.
On the other side of the legal fence,
United Torah Judaism MK Moshe Gafni proposed legislation that would
exempt graduates of specific haredi institutions from the bagrut
Behind this legal maneuvering is a substantive question
relating to the professional standards of tax advisors. The Association
that relaxing the bagrut requirement will lower the level of
the quality of tax reports received by the authorities.
Gafni claims that
leaving it where it is creates a barrier to entry to the profession for
of his constituency who are perfectly qualified for the job.
we resolve this question? To what extent should the practitioners of a
profession be allowed to determine the conditions of entrance to the
At one extreme we find the position of economist Milton Friedman, who
kind of professional licensing as mere monopoly power. He felt that any
should have the right to practice medicine, law or any other profession.
consumer wants someone with professional credentials, he can choose to
business only to a practitioner who meets certain standards, but that
his choice. Friedman anticipated that private organizations would arise
certificates to qualified practitioners in return for a licensing
One response to Friedman is to say that the consumer did indeed
decide to trust a reputable licensing body; they called it the
as the average consumer has no real way of telling if one surgeon is
qualified than another, he has no real way of telling if one private
body is more reputable than another. The free-market solution is to
decision to a government regulation, thus ensuring public
Governments can also be actors in the free market, and they
have efficiency advantages in many areas over private bodies.
if the government wants to know what qualifications a doctor, accountant
advisor should have, they will turn to experts in the field.
fundamental legitimacy of licensing can’t make the conflict of interest
There will still be a tendency to make very strict conditions
of entry in order to limit competition, against the public interest.
our case, it may be true that requiring bagrut exams will lead to higher
standards in the profession. But it will also exclude many qualified
Requiring bagrut exams for carpenters would probably also
raise the average level, but it would also drive many excellent workmen
field and make it hard to find a good carpenter.
This decision must
ultimately be left to the legislature, which is charged with balancing
It seems to me that requiring a bagrut exam is an
artificial barrier to entry that excludes many qualified candidates,
the Beit Ya’acov graduates Gafni is trying to help.
Allowing them to
provide tax advice will help them and their clients.
So with due respect
for the legitimate interest of tax advisors in maintaining adequate
standards, I identify with the effort to remove excessive and artificial
obstacles to professional firstname.lastname@example.org Asher Meir is
research director at the Business Ethics Center of Jerusalem, an
institute in the Jerusalem College of Technology (Machon Lev).
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