Proposals Encourage Entrepreneurs on "Small Businesses Day"
January 9, 2007. Arutz ShevaTuesday was designated "Small Businesses Day" in the Knesset. Proposals for legislation that would encourage entrepreneurial ventures were put forward and debated.
The Knesset Finance Committee, and the Knesset Labor, Welfare and Health Committee both held special sessions in recognition of Small Businesses Day. The committees discussed various parliamentary and legislative initiatives designed to help independent freelancers and small- to mid-sized business owners.
Member of Knesset Yaakov Litzman (United Torah Judaism), chairman on the Finance Committee, said, "Despite the increased government aid to small businesses, in my estimation, it is still not enough. Therefore, I have decided to establish a special subcommittee to examine the difficulties faced by small and medium businesses, and it will come up with new sources of funding to increase the assistance."
Minister of Industry, Trade and Labor, MK Eli Yishai (Shas), told the Finance Committee that he is drafting a government bill that would include a series of financial incentives for small business owners, including a possible exemption from the Value Added Tax (VAT) requirement. Yishai called small business "the biggest business in the State of Israel," citing statistics showing that 400,000 small businesses employ some 1.2 million workers.
Chairman of the Small and Mid-Sized Businesses Authority, Shmuel Rosenman, told committee members that a total of 600 million shekels in financial aid was awarded by the small businesses fund to 2,100 companies and entrepreneurs over the past three years. Rosenman noted that 86% of the businesses that were awarded financial aid are now growing and expanding. He furthermore called upon the Finance Committee to remove red tape and other bureaucratic difficulties that stand in the way of small businesses seeking government-backed loans.
MK Litzman questioned a representative of the Finance Ministry regarding the amount of aid extended to small businesses affected by the recent war in Lebanon. The ministry spokesperson said that qualified recipients of aid in northern communities received 1,400 government-backed loans, totaling 70 million shekels.
In the Knesset Labor, Welfare and Health Committee, three different proposals that would legislate unemployment compensation for the self-employed were brought up for discussion. The three bills were submitted by MKs David Tal (Kadima), Orit Noked (Labor) and Yuri Shtern (Yisrael Beiteinu). The sponsoring MKs emphasized that the small entrepreneurs are the engine that drives the national economy and that they must therefore be given a safety net to encourage them to establish their businesses.
A representative of the Finance Ministry told the Knesset committee that the government currently objects to the bills, but that they would be acceptable if they were drafted in coordinaton with Finance Ministry officials. Knesset chairman MK Moshe Sharoni (Pensioners) demanded of the representatives of the Finance Ministry and the National Insurance Institute in attendance to present a report within 45 days that details how unemployment compensation could be paid out to self-employed entrepreneurs. If the two bodies fail to do so, Sharoni said, "then we will push the bills forward without them."
Companies in Israel are categorized as micro, small, medium or large depending on their number of employees and annual sales: up to five employees and 10 million shekels annually is called a "micro business"; between 5 and 50 employees with up to 25 million shekels in sales is defined as a "small business"; up to 100 employees and 100 million shekels in sales is a "medium-size business"; and anything larger is a "large business".
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