Israeli bureaucrats: Their fight against small businesses
When it comes to SMEs – small medium sized enterprises – around the globe, two themes repeat themselves. First, they comprise over 90% of all commercial activity. Second, all governments claim to support them, while the civil servant often takes a different attitude.
And in Israel?
If you are looking for a miracle from the Holy Land, I am sorry to disappoint you. My experience as a business mentor and coach in the Jerusalem area throws up story and story, a veritable reservoir of material, as to how officials insist on being small minded when it comes to “helping” SMEs.
Just look at these instances faced by clients and associates just recently.
- An owner of a launderette has just opened a second outlet in North Jerusalem. He excitedly posted a notice on his glass door, announcing the premise was open for business. A few days later, two officials from City Hall turned up unexpectedly and declared that the A4 piece of paper was a “sign”. That requires a full license, which he did not have. He was duly fined about 1,100 nis – say US$300. By the way, if the notice had been placed on the outside of the door, the sum would have been around 1,500 nis!
- My client was busy with some administrative tasks in his Jerusalem premise, when in walked two officials from the income tax authority. They found that he did not keep a diary of all appointments, apparently a foul crime. He had also not managed to receipt two cheques from the previous day. Their value was around 4,000 nis. His total fine was close to 5,000 nis for his heinous crimes against humanity, about half his take home pay per month.
- My office is in an area, known for a chronic shortage of parking. Last week, I could not find one spare spot for my vehicle. After all, due to new construction, lorries were parked in some of the spots. And road works ensured that another 30 places had been dug up. With pressing appointments waiting for me, I parked illegally. And you have guessed the next line – one 500 nis parking fine was waiting for me several hours later.
- I am furious on behalf of one of my clients. Due to a technical issue, the income tax authorities demanded additional paperwork. This held up vital procedures at the bank. The pieces of paper were rapidly delivered. However, a glitch meant that the bank could only see on the computers that they were not allowed to process their work. Despite protests over weeks, the tax officials could not fix the problem. My client was asked to pay a large fine – thousands of shekels – and suddenly everything was fixed!
I could go on. It is assumed that in some of the instances, the officials are paid some for of bonus or success fee for their efforts. And you are reading this and shouting out “appeal, appeal”, I have to ask: “Have you got the time and effort”? In one case, the person involved was explained the process and cautioned that it could end up with a stiffer fine.
The good news is that……………the government believes in supporting SMEs………assumedly via the extra taxes that collect through situations as described here.