How 23 foreign journalists got to keep their tax breaks

MKs voted down a clause in the Economic Arrangements Bill that would have eliminated tax breaks for foreign journalists stationed in Israel.

December 24, 2010 02:38
2 minute read.

Shelly Yacimovich. (photo credit: Ariel Jerozolimski)


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A rare series of coalition-opposition alliances this week resulted in MKs voting down a clause in the Economic Arrangements Bill that would have eliminated tax breaks for foreign journalists stationed in Israel.

Opposition to the bill began with the usual suspects: the opposition’s Nahman Shai (Kadima) and outspoken Shelly Yacimovich (Labor) began to protest against the clause as deleterious to Israel’s public diplomacy efforts. Opposition attacks against clauses in the Economic Arrangements Bill, however, rarely ever take hold and present a realistic challenge to the coalition – unless they find powerful supporters on the other side of the aisle.

Winners & losers in the Economic Arrangements Bill
‘Shortsighted’ Treasury bids to tax foreign reporters

In this case, Shai and Yacimovich argued that the clause had no budgetary benefit. Just 23 members of the foreign press corps now qualify for the special status, by which they are entitled to a 25 percent discount in their income tax payments if they have been stationed in Israel for less than three years.

Originally, the Economic Arrangements Bill sought to rescind the tax breaks offered both to foreign journalists living in Israel and to foreign athletes playing for local professional soccer and basketball teams.

The athletes earn much more than the journalists, and they have powerful supporters among the professional sports leagues, which successfully pressured the Treasury to remove the clause about sportsmen’s tax breaks.

The foreign correspondents soon found backroom support from coalition partner Israel Beiteinu, primarily Tourism Minister Stas Meseznikov. Meseznikov then urged his faction’s representatives on the Finance Committee – MKs Lia Shemtov and Faina Kirschenbaum – to oppose the measure, and they were joined in their fight by coalition chairman MK Ze’ev Elkin (Likud) and MK Zevulun Orlev (Habayit Hayehudi).

Pressure was increased when Hebrew-language newspapers, including The Marker, Globes and Ma’ariv, all jumped on the bandwagon in support of their colleagues, running articles that criticized the clause as needlessly alienating foreign correspondents.

A third coalition against the clause was formed within the government itself, as newly-instated Government Press Office director Uri Helman circulated among ministers and key officials at the Prime Minister’s Office to persuade them to remove the clause. “I told everyone, the Finance Committee and the journalists themselves, that the clause was incorrect and a great mistake,” Helman said.

Without the benefit of revenue gained from the more lucrative athletes’ salaries, the government had little incentive to pursue the clause that remained in the Economic Arrangements Bill.

When the now-vestigial clause came up for vote in the Finance Committee, coalition members had already committed to voting against the it, and the Treasury did not argue as the clause was defeated.

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