Israel's Tax Reform Plans Scaring Off Foreign Investors

by Philip Morton, Investors Offshore.com

20 November 2002

Speaking following his return from the United States on Monday, Yair Rabinovitch, the chairman of the committee which put together the tax reform package set to be implemented in January 2003, warned that foreign investors are being scared off by Israeli tax consultants.

He told the Ha'aretz news service on Tuesday that the nation's taxation experts are often somewhat vague regarding the implications of the forthcoming tax changes for expats and foreign investors, and as a result are sometimes persuading their clients to exit Israeli investments unnecessarily.

Also speaking this week, Avi Alter, a CPA and fellow member of the tax reform committee who accompanied Mr Rabinovitch revealed that during their trip to America, the two men had met with representatives from credit-rating agencies, investment banks, and analysts in order to clarify the main points of the reform package.

According to Ha'aretz yesterday: 'Alter said that he had allayed potential new immigrants' fears that the reform would strip them of tax entitlements. He had told them...that they would not pay higher rates of tax as a result of the reform and that in some instances, they would benefit as a result of the changes.'

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