Finance Minister Moshe Kahlon and United States Treasury Secretary Steven Mnuchin, July 25, 2017..
(photo credit: Courtesy)
Finance Minister Moshe Kahlon stressed his intention to further economic partnerships with the United States, as well as adapt to the country’s expected tax reform, in a meeting with Treasury Secretary Steven Mnuchin on Monday.
The Israeli and American counterparts convened as part of Kahlon’s first official visit to Washington this week.
While emphasizing the need to strengthen economic cooperation between the two countries as a whole, Kahlon also asked Mnuchin to exert pressure on the Palestinian Authority in the war against money laundering and terrorism financing. In response, the Treasury secretary said that the issue would be examined, and expressed his administration’s admiration for Israel, according to a Finance Ministry statement.
Kahlon and Mnuchin also discussed the potential tax reform that the Trump administration is working on this year, including expected cuts in the corporate tax sphere.
The Trump administration issued a one-page brief regarding the tax reform in question at the end of April, describing the plans as “the biggest individual and business tax cut in American history.” The reform, according to CNBC, aims to create millions of jobs for the American economy, provide tax relief to American families and lower the corporate tax rate from one of the highest in the world to one of the lowest – from 35% to 15%.
“The Israeli economy is deeply connected to the American economy,” Kahlon said during his meeting with Mnuchin. “We are closely monitoring the expected tax reform in the US and its impact on the Israeli economy, and if necessary, we will make the required adjustments.”
Kahlon and Mnuchin also discussed a previous US tax reform that helped lead to the Israeli hi-tech revolution, as well as the continued prosperity of American research and development centers in Israel.
At the meeting, the counterparts agreed that the two countries would set up a negotiating team to examine the economic implications of upgrading the bilateral Treaty for the Prevention of Double Taxation, the Finance Ministry statement said. This step is expected to regulate the rates of withholding taxes and the tax rights of investors in both countries, as well as remove investment barriers and improve the investment environment in Israel, the statement added.
“The alliance between Israel and the US is a courageous alliance that cannot be severed,” Kahlon said at the meeting. “We will continue to promote economic cooperation initiatives in new areas, in a way that will strengthen both economies.”
Kahlon and Mnuchin agreed to meet again this year, in Israel in September, according to the ministry.
As part of his Washington visit, Kahlon also met with Mick Mulvaney, director of the US Office of Management and Budget, at the White House on Monday morning. During their meeting, Mulvaney told Kahlon about the steps taken by the Trump administration to reduce regulation, in order to improve the growth and productivity of the US economy, the Finance Ministry statement said. At Kahlon’s request, the parties agreed to establish a joint team to explore this subject.
Kahlon discussed with Mulvaney how he is trying to lead a similar process in Israel, including building tens of thousands of housing units for young couples, strengthening industry, increasing competition in imports and exports, investing in infrastructure and reducing the cost living, the finance minister wrote on his Facebook page on Monday evening.
On Tuesday afternoon, Kahlon once again took to Facebook, to specifically thank Mnuchin for his “very warm welcome.”
“Together we will lead our two economies toward unprecedented mutual growth,” the minister said.