Israel's APTC Calls For Abolition Of Tax On Mutual Fund Dividends

by Mary Swire, Tax-News.com, Hong Kong

31 July 2001

The Association of Publicly Traded Companies in Israel has submitted a position paper to the Government Companies Authority, it was revealed recently. In it, the Association condemns the taxation rules regarding mutual fund dividends as unworkable and old fashioned, and asks for legislation changes, saying: 'The directive in effect prevents mutual and pension funds from having holdings in enterprises, thereby torpedoing the attempt to include the funds in the privatisation process.'

The chairman of the APTC, Amos Mar-Haim has asked the director general of the Government Companies Authority, Yaron Jacobs, to join the ongoing public struggle to allow mutual and pension funds to have holdings in companies and concerns without being obliged to pay tax on profits from the investments, claiming that the existing situation is intolerable, and by damaging the possibility of significant capital market reform, harms Israel's competitiveness on an international level.

Mr Mar-Haim added that the current law prevents competition for the control of companies which is necessary to prevent improper management and corruption, and leaves the economy in the hands of a highly concentrated group of concerns, and Israel's richest, most powerful families.

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