Gov't pays NIS 128.5m. in negative income tax

2007 legislation, implemented in stages, will finally go nationwide this year.

April 14, 2011 06:21
1 minute read.

taxes. (photo credit: courtesy)


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The Israel Tax Authority has paid out NIS 128.5 million in 2010 through the negative income tax to salaried employees and the self employed who applied for it.

77,000 applications for the negative income tax were filed last year, of which 46,000 have so far been approved, and 26,000 were disqualified.

34 percent of the disqualifications were because the applicants do not reside in the relevant areas (where the Wisconsin welfare-to-work program operates), 29% of applicants earned too much, and 13% earned too little.

The Increasing Participation in the Work force and Reducing Social Gaps Law (referred to as negative income tax) is being applied in stages.

Initially, in the 2007 tax year, it applied only to eligible residents in areas where the Wisconsin program operates.

In 2008, it was expanded to include eligible salaried employees and self-employed people in these areas.

In 2009-10, the negative income tax was further expanded to include working mothers and single parents with at least one child under the age of two both salaried employees and self-employed, even if they did not reside in Wisconsin program areas. This year, the negative income tax will apply to eligible persons nationwide.

Applications for negative income tax can be filed at any post office, which inputs them directly into the Tax Authority’s computers. The Tax Authority’s page at the Ministry of Finance website has a simulator to test eligibility and where applicants can check the progress of the handling their applications.

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