Rising to the occasion?

Most of Israel's local authorities are owed millions of shekels in unpaid taxes, from both residents and businesses.

knesset 298.88 (photo credit: Ariel Jerozolimski)
knesset 298.88
(photo credit: Ariel Jerozolimski)
Jerusalem residents have recently received a request to pay a supplement to their arnona (municipal taxes). About half a year ago, the Knesset ruled that each local authority's arnona must be raised by 3.08 percent. At the Jerusalem city council meeting at which Mayor Uri Lupolianski presented the decision, he said it was his intention to ask the Interior Ministry, responsible for local authorities, to allow the Jerusalem Municipality to raise its arnona for 2006 by only 2.5%, "due to the fact that the financial situation of the municipality is much better, thanks to the rehabilitation plan." The opposition's reaction at the meeting was that the mayor was using a spin, "since there is no way the Interior Ministry will allow it, so as not to set a precedent." During the same meeting, it turned out that the municipal general manager, Eytan Meir, had not been briefed about the mayor's decision. Meir later declared that the difference between the requested 3.08% and the 2.5% preferred by the mayor would end up costing tens of millions of dollars, which he did not know how he would replace in the municipality's budget. Recently, as expected by the opposition, the ministry vetoed the mayor's idea to give residents a reduction. Now the municipality has ordered all residents to pay the difference, since the arnona rate this year was not updated and stayed the same as last year, until the final decision was made. In some neighborhoods, the difference could reach thousands of shekels, which must be paid by the end of 2006. Meanwhile, a survey issued by the ministry revealed that most of the country's local authorities were owed millions of shekels in unpaid taxes, from both residents and businesses. The Jerusalem Municipality is in first place, with NIS 2 billion unpaid. Most of those debts are from government ministries in the city, with the Defense Ministry top of the list with a debt of NIS 17 million to the municipality. The municipality offers a special track to those who wish to pay their debts before any legal actions are taken against them, the condition being that all the payments for 2005 and 2006 have already been arranged. Those who opt for immediate cash payment of all their debts for 2003-2004 will benefit from a 50% reduction. If they choose to pay in installments, they will get a 45% reduction. Members of the opposition remarked that this arrangement, which might bring some money into the municipal coffers, might also send a bad message - that if you wait long enough without paying, there will always be an opportunity to pay less than you should. The municipality spokesman issued an statement that Lupolianski was pleased to offer the citizens an opportunity to pay off their debts in a convenient manner for the benefit of all residents.