Finance Committee Chairman Yaakov Litzman this week delayed the transfer of billions of shekels in already approved funds to protest what he called "the scandalous delay" in execution of the NIS150 million fund for teachers of haredi cultural organizations.
The haredi, fund which was supposed to come into effect at the beginning of the year, has been delayed over disagreements regarding the specifications and new criteria of the fund demanded by Amnon de Hartoch, the Justice Ministry's commissioner for support funding criteria.
At the Finance Committee meeting Wednesday, Litzman continued his protest by refraining from voting on the formal approval of the transfer of funds and to enforce a re-evaluation of budget requests. Among the funds that were delayed were an assistance fund of NIS 50m. to the police and a NIS 18m. fund requested by the Ministry of Defense.
Litzman started the protest on Tuesday by calling for a re-evaluation vote on 36 budget requests halting the execution of billions of shekels including transfer of a NIS 1 billion request by the Education Ministry for classrooms and other funds.
Separately, the Knesset Finance Committee thwarted the Treasury's efforts to raise the tax levied on the employment of foreign workers in the agriculture and building sector to 12%. The Finance Committee on Wednesday approved an 8% tax rate that would be levied on the employment of each foreign worker in 2005. The rate would go up to 10% in 2006 with no additional increases in 2007. The Treasury had previously proposed to raise the levy to 12% in 2007.
The levy is a way of better regulating the employment of foreign workers, while reducing their numbers. The employer of a foreign worker is charged a levy at a percentage rate relative to the total wage paid to the foreign worker, which is collected by the Income Tax commissioner. Higher fees for employers who hire foreign workers, was seen as part of an effort to increase the hiring of Israelis.
Additionally, the Finance Committee gave its approval to a tax credit of 2.5 points retroactively applied from 2003 to which foreign workers - who are residents - will be eligible.