Tom Livne, the founder of the $2b Israeli tech unicorn Verbit, has announced that he intends to leave Israel and stop paying taxes in protest of the government’s intention to reform the country’s judicial system, calling others in the hi-tech sector to join him.
Livne is one of several leading Israeli tech executives who have pulled out their funds in protest against the judicial reform, which critics say will tank Israel’s reputation among foreign investors, thereby weakening the Israeli hi-tech sector (which relies heavily on foreign direct investment).
In an interview with Channel 12, Livne explained that the tech industry, which he called “the engine of the economy,” must take a hard stance in order to convince the government to reconsider its plan. “Then they’ll come to the table and talk to us as equals,” he said.
“I hope [others] will see me doing this and follow my lead… to stop residing in Israel and to stop paying taxes. This is the solution and one that will hurt [the government] the most,” he continued, adding that he has already begun withholding investments in the Israeli economy.
Hey Tom, u up? DM me ur number and we’ll sort this out
An exchange on Twitter has shown that Livne’s actions have yielded results — or at the very least the “talk as equals” that he had hoped for.
On Twitter, Livne retweeted a video of his interview, which garnered over 615k views within 16 hours. Shortly thereafter, Finance Minister Betzalel Smotrich replied to the video, telling Livne “Hello Tom, we are brothers. Hope you come back… We promise, with God's help, to keep Israel Jewish and democratic, strong and economically prosperous, so that you and every Jew will always have a home to return to.”
שלום תום, אחים אנחנו. מקווה שתחזור בך. אין לנו ארץ אחרת ועם אחר ומדינה אחרת. בכל אופן, מבטיחים לשמור בעזרת השם על ישראל יהודית ודמוקרטית, חזקה ומשגשגת כלכלית, כדי שתמיד יהיה לך ולכל יהודי בית לחזור אליו. https://t.co/y9n8dPpMXM
— בצלאל סמוטריץ' (@bezalelsm) January 31, 2023
Replying to Smotrich, Livne wrote: “If we are brothers then let's talk and find a solution that allows us to live in a democratic country for which I fought (and fight) as a paratrooper and as a business entrepreneur for all of us. I'd be happy to meet.”
Smotrich then requested that Livne send his cell phone number via Direct Message, in order to coordinate a conversation.
Not the first to go
Livne is one of several tech leaders in Israel to pull out of the Israeli economy in protest of the judicial reform. Last week, CEO of Papaya Global, Eynat Guez, announced via Twitter that her company would be pulling its money out of Israel.
“Following Prime Minister [Benjamin] Netanyahu’s statements that he is determined to pass reforms that will harm democracy and the economy, we made a business decision at Papaya Global to withdraw all of the company’s funds from Israel,” Guez tweeted. “In the emerging reform, there is no certainty that we can conduct international economic activity from Israel. This is a painful but necessary business step.”
Papaya Global’s 700 customers include Microsoft, Toyota and General Dynamics, according to Forbes. The company was valued at $3.7 billion in 2021.
Later on the same day, Disruptive Technologies Venture Capital, a Herzliya-based investment fund, also announced its decision to pull out of Israel’s economy. The Disruptive and Disruptive AI venture-capital funds manage $250 million.
“Assuming the reform, which is a legal coup, happens, economic instability will be created in the State of Israel, when in practice there will be one authority that will do what it wants, including corrections and changes in taxation and the way companies work,” Disruptive Technologies founder Tal Barnoach said.
“Economies are built on stability. I am now in London. I met my investors, and they are very worried. They say that if the reform passes, it is not clear to them if they will continue to invest in Israel, and they may have to make a change because they do not want to be at the mercy of one authority,” Barnoach continued. “The message here is that the banking activity in Israel will also be affected, and this is what they do not understand: that the next in line to be affected will be the citizens of Israel and less money for people who need it.”