The city of Tel Aviv has decided to give a 20 percent discount on municipal taxes to insurance companies - a move that will cost it about NIS 5.4 million per year, reports the Hebrew weekly Yediot Tel Aviv. The decision is arousing controversy, with critics saying that insurance companies make "millions" and can afford the taxes, and that residents are carrying the burden for the city's "winking" at large companies. According to the report, the city's Financial Committee, headed by Mayor Ron Huldai, decided to award the discount to prevent the companies from leaving Tel Aviv for cheaper cities. Some 96 insurance companies operate in the city, paying NIS 463 per square meter each year. Huldai said he suggested lowering this rate by 20% to NIS 371 per square meter to keep them in the city. But when questioned by councilor Mordechai Virshuvsky whether he knew for sure that this would prevent the companies from leaving, Huldai admitted that no investigation into the subject had been carried out. Virshuvsky said the city had first given discounts to banks and now was doing the same for insurance companies, which were hugely profitable and could afford to pay the full amount. "The message we are giving to residents in this process is terrible," Virshuvsky said. "Whoever has funds and is valued by us gets a discount, but the small citizen who has nothing has to continue paying the full price." A municipal spokesman responded that municipal tax rates were decided in relation to other cities and as part of municipal strategies, and this was how the insurance companies' tax rates had been fixed.