Thursday, March 17, 2005

Tax evading Rabbis

One would think that it is simple common sense that if someone is paid for performing an action or supplying a service, they should pay tax on it - not so if you are a famous Rabbi however.

Why the Attorney General should need to issue a specific instruction that certain incomes, estimated at between NIS 1 - 2 billion per year, are taxable is beyond me.

According to an article on Ynet,
"As far back as October 2003, tax inspectors warned they would tax the earnings of rabbis and mystics who charged for blessings and amulets."
The question which begs to be asked of course, is why before October 2003, tax inspectors did not tax these earnings? If a lawyer or other professional person performs a service for which he charges, he or she is liable to pay tax. If a carpenter makes and sells a chair, he must report and pay a sum to the tax authorities. If a person does not pay tax in these circumstances then they are liable to find themselves in a court of law charged with tax evasion.

So how is it that Rabbi Abuhatzeira, ordered to pay NIS 100 million in tax, bargained the authorities down to NIS 20 million to be given to charitable institutions (presumably of his own choosing)? If I were to inform the tax authorities that I was only going to pay 20% of what they demanded and not to them but to various "charities" would they even give me the time of day?

The Ministry of Justice clarify - it's been a "grey area" up until now. People with income through services and sales totalling NIS 1 billion plus per year is a "grey area"? How? Where's the complication? It's fairly clear for every other sector in the economy. Charge them the full rate with fines for back taxes and give Yossi Average a break.....


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