Federation calls for end to unequal tax system

While a 100-square-meter office in Tel Aviv pays NIS 25,573 in property taxes, a factory of the same size pays just NIS 13,310.

By MIRIAM BULWAR DAVID-HAY (TRANSLATED)
Shops and offices in Tel Aviv pay almost double the property taxes that industry and factories pay, a survey by the Federation of Israeli Chambers of Commerce has found. And the federation says the "selective and distorted" system of determining the property tax (arnona) by the type of business is destroying many enterprises and must end, reports www.local.co.il. According to the report, the federation recently conducted a nationwide survey which found that on average, stores and offices in Tel Aviv pay 81 percent more in property taxes than factories and industry do. While a 100-square-meter office in Tel Aviv pays NIS 25,573 in property taxes, a factory of the same size pays just NIS 13,310. "The commerce and service sector today is a milk cow for local authorities," federation president Uriel Lynn said. "But this failed management is destroying or hindering many businesses and is causing negative growth. This selective and distorted method that decides property taxes according to the type of business must pass from this world." But however "distorted" the taxation system in Tel Aviv may be, the federation's survey found that it is not the worst offender - Jerusalem is, with offices and shops there paying an average of 200 percent more in property taxes than factories and industry pay. A 100-square-meter office in Jerusalem pays NIS 27,800 in property tax, the highest rate of any city. The survey also found that the city with the smallest difference between the two sectors is Rosh Ha'ayin, where a 100-square-meter office pays NIS 7,158, while a factory of the same size pays NIS 6,543 - a difference of just nine percent.