Who will pay, who will invest, and who will stay in Israel? The test of the next government in high-tech
The next government will need to decide on taxation issues, AI infrastructure, chip and quantum programs, boycotts, and oversight of foreign investments, according to a document from the High-Tech Association. The sector accounts for 18% of GDP and 58% of exports.
The next government to be formed after the 2026 elections will need to decide on a series of critical issues for the future of Israeli high-tech, according to a document from the High-Tech Association of the Manufacturers Association. The sector accounts for about 18% of GDP, about 58% of exports, and employs about 400,000 workers. Among the decisions: formulating the 2027 budget with cuts and tax increases, including changes to employee option taxation and a benefit for entrepreneurs with a capital gains tax exemption of up to 45 million shekels. The issue of AI server farms will require a decision on their definition as national infrastructure and on funding energy infrastructure. Also on the agenda are an Israeli chip program and a national quantum program following an investment of 1.5 billion shekels. Additional challenges include dealing with boycotts and international trade restrictions, oversight of foreign investments to maintain relations with the US, and preventing companies from leaving Israel. The association calls for appointing a single minister to coordinate technology policy.