Kahlon, Ariel slash taxes on employing foreign farm workers

Finance Ministry says move will save NIS 100 million across sector.

By SHARON UDASIN, NIV ELIS
Vegetables: cucumbers and tomatoes (photo credit: AMY SPIRO)
Vegetables: cucumbers and tomatoes
(photo credit: AMY SPIRO)
In a bid to boost agricultural output, Finance Minister Moshe Kahlon and Agriculture Minister Uri Ariel on Wednesday agreed to scrap taxes on employing foreign agricultural workers and increasing deductions.
Deductions will be increased some NIS 300 to NIS 530, which the Finance Ministry estimates will save the average farmer NIS 16,000 annually, and some NIS 100 million for the sector as a whole. Further plans to cut out middlemen and make the industry more efficient are in the works, but the tax breaks will go into effect starting in January of 2016.
The ministries hope the move will help support local farmers, while also reducing the price of food.
Describing the “family farm” as a critical partner in the Israeli agricultural framework, Kibbutz Movement secretary-general Nir Meir stressed that the tax has constituted an “existential threat” to this farm’s survival.
“The cancellation is a significant step in the right direction,” he said on Wednesday night.
Although he praised the decision of the finance and agriculture ministers, Meir noted that Israel’s governmental support for agriculture is among the lowest in the Western world.
“We will continue the negotiations with the Finance Ministry with out eyes wide open, with the clear understanding that we have not yet removed all the obstacles that will ensure the continued existence of Israeli agriculture,” he added.
Israel Farmer’s Federation chairman and Moshav Movement secretary-general Meir Tzur likewise welcomed the decision on Wednesday night, noting that his organizations would likewise continue negotiations toward ensuring the livelihood of farmers.
Israel Farmer’s Federation secretary-general Avshalom Vilan also expressed appreciation for the move the same evening.
“One small step for the Treasury, one giant leap for agriculture,” Vilan said. “We appreciate and value the step taken after a six-year struggle, and hope that the negotiations currently in progress regarding the future of agriculture in Israel will bear fruit.”
The Israel Farmers Union, meanwhile, praised the decision as a “confidence-building measure.” The union stressed, however, that this is a “first step and does not necessarily provide for the preservation and development of agriculture” and called upon the ministers to generate a long-term plan in the coming months in order ensure the security of the nation’s farmers.
Wednesday, Histadrut labor federation chairman Avi Nissenkorn said the government had to boost the sector, which he said was “in the deepest crisis it has seen in years.”
The solution, he added, is not allowing more foreign imports into the market.
MK Eitan Broshi, chairman of the Knesset’s Agricultural Lobby, similarly described the decision to abolish the tax as “the first step in a series of measures that the government must follow in order to strengthen agriculture.”
Broshi also praised Finance Committee chairman Moshe Gafni for his contributions toward achieving the decision, which he said will “enable significant relief for farmers who employ foreign workers.”
He cautioned, nonetheless, that the struggle is far from over and that “there are many obstacles preventing agriculture from developing.”
In the agriculture sector on Thursday, but unrelated to the tax abolition decision, the Agriculture Ministry elected to extend licenses for the duty-free import of tomatoes from around the world. This move, which builds upon previous such steps taken in September, occurred due to the tomato shortage that has arisen due to the summer’s heat waves and the spread of the ToMV tomato mosaic virus.
Although tomatoes planted in Israel in August are expected to arrive in the market in about two weeks, the shortage is expected to continue through early December, the Agriculture Ministry said.
However, in order to prevent damage to local farmers and avoid flooding the market, the duty-free import quota is being limited to 1,500 tons weekly as necessary. Tomato shipments have already begun to arrive from Turkey, the ministry added.