A heated fight is taking place these days in the Knesset’s Finance Committee, very much beneath the public radar, largely because of the fighting in Gaza. This battle calls into question the ability of Finance Minister Yair Lapid to enact one of the signature decisions of his term as minister so far: approval of the law to exempt buyers of a first apartment from paying a value-added tax (VAT) by Sept. 1.
On July 31, the Knesset will begin its summer recess. The “Zero VAT Law,” which should be Lapid’s greatest accomplishment for the next elections, is still stuck in the Finance Committee, waiting for approval in its second and third reading. The chairman of the committee, Knesset member Nissan Slomiansky of HaBayit HaYehudi, is heaping obstacles before the approval process of the bill, especially with the head of his party, Economy and Trade Minister Naftali Bennett, busy plotting in the background. Once a close ally of Lapid, Bennett has since become one of his major rivals. Knowing that Lapid is under a lot of pressure, Bennett is taking advantage of that to get more money for the settlements, or so say other members of the Finance Committee.
Lapid will do everything in his power to ensure that this law, which passed its first reading at the beginning of July, is approved by the Knesset before it adjourns for the summer. Members of the committee say that even though Lapid is also a member of the Defense Cabinet, spending many hours dealing with Operation Protective Edge and visiting the south, he is still very preoccupied by the fight over his proposed law, which is intended to provide a solution to the high cost of housing in Israel.
The fate of the law remains uncertain, at least at this stage, but the committee believes that Lapid will show some flexibility and acquiesce to the demands of Slomiansky and Bennett so as not to embarrass himself publicly and politically. The law, which grants military veterans an exemption from VAT when they buy an apartment worth up to 1.6 million shekels (about $470,000), is intended to be the crowning achievement of his terms as finance minister. It is supposed to bolster the Yesh Atid Party’s standing among younger members of the middle class, a group whose support for Lapid and his party has dropped dramatically in the polls since the last election.
AL-MONITOR All-Access gives you unlimited access to all our journalism, the full Daily Briefing, exclusive interviews, premium newsletters, and live events — for less than $2/week.
