Smotrich opposes plan to hike tax on tech workers' options
Finance Minister Bezalel Smotrich opposes a proposal by a special team to raise the tax rate on employee stock options in the tech industry from 25% to 30%. He called the idea a mistake that would harm the economy and every citizen, arguing that technology workers are a key engine of the country. The proposal was not meant to be published before the October 27 election, and Smotrich's veto has no operative significance as he may not retain the finance portfolio. The tech industry has reacted with uproar, warning the tax hike would drive companies and workers abroad.
Finance Minister Bezalel Smotrich has publicly opposed a proposal by a special team tasked with formulating tax reform in the technology industry to raise the tax rate on employee stock options. The proposal would impose a 30% tax on options not exercised at the end of the vesting period, up from the current 25% reduced rate. Smotrich wrote that the attempt to raise the tax burden on the high-tech sector is a bad idea and a mistake that will harm the economy and every citizen. He stated that technology workers are part of the country's main engine and that there is no need to hike taxes. However, the recommendations were not meant to be published before the election on October 27, and Smotrich's veto has no operative significance at present, as he may not hold the finance portfolio in the next government. The technology industry has been in uproar over the proposals, arguing that raising the tax on options not exercised quickly will severely harm companies and workers, who are already leaving the country en masse. Adv. Doron Mutai of law firm Pearl Cohen noted that the taxation of options in Israel is a complicated subject and questioned the aim of the proposal, calling it a double-edged sword.