Israel - Panel recommends unification of Tax Authority

The Suari Commission, charged by Finance Ministry director general Yarom Ariav in May with the examination of the current structure of the Tax Authority, is recommending further integration of the authority's direct and indirect tax branches under one branch.

"Right now, the Tax Authority is not functioning as best as it could be," said the commission, which was chaired by Professor Yitzhak Suari and included current and former Tax Authority officials, in its report issued late Tuesday to Finance Minister Ronnie Bar-On. "By joining the two branches together the authority will become more efficient and better equipped to handle its work load."

Currently, the income tax and property tax fall under the management of the direct tax branch, while the indirect tax branch is responsible for levelling taxes on consumption, such as on the importation of goods, Value-Added Tax, purchase tax and customs.

The decision to unify the branches of the authority was first suggested some four years ago by then finance minister Binyamin Netanyahu. While the process of unification did begin, it was never properly completed, resulting in confusion and less efficiency within the authority's various departments.

The commission recommended that the authority undergo a process of complete unification between the two branches, also suggesting that the manager of the direct tax division be charged with taking responsibility for the activities of the indirect branch.

"This is a stupid decision," Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, responded to The Jerusalem Post. "I think that the two divisions should be kept separate and gradually they should be integrated - this will allow for maximum efficiency and minimum confusion."