Finance Minister Dr. Yuval Shteinitz over the weekend met with Shas leader Minister Eli Yishai and other party officials in the hope of reaching agreement on the government’s controversial plan to impose 16.6% value added tax on fruits and vegetables.
Three options discussed are the cancelation of a proposed lowering of taxes in January; another increase of VAT from 16.5% to 17% but not levying the tax on produce and the last option is to levy the tax over a three year period from 0-5%, then to 10% and ultimately to 16.5%. None of the options seem to generate the NIS 2 billion the treasury hopes to amass by levying the new tax so for now, Shteinitz remains opposed to Shas’ suggestions.
The budgetary issues will be addressed in the Knesset Finance Committee on Tuesday and Wednesday, at which time it will become clearer if the VAT tax will be imposed on produce or not.
Two other controversial budgetary issues include a excess water usage tax and a tax on tourism, a move tourism industry officials warn will have a negative impact and possibly deliver a fatal blow to the profitable tourism industry. The treasury hopes to earn an additional NIS 3.5 billion annually from the new taxes.
Prime Minister Binyamin Netanyahu has imposed coalition discipline and any Finance Committee member not going along with the government’s agenda will be asked to step down from committee or alternatively, will be ousted against his will.
According to a Yisrael HaYom report, Likud MKs including Miri Regev and Danny Danon are meeting on Sunday night to discuss their opposition to the new taxes.
In the meantime, the Finance Ministry is preparing NIS hundreds of millions to be used to compensate low-income families following the recent increase of VAT from 15.5% to 16.5%.
(Yechiel Spira – YWN Israel)
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One Response
Outright ridiculous ideas to impose these taxes. Make it easier bureaucratically to open and run an honest business, encourage middle class growth, support Lomdei Torah. Maybe then we will see some positive growth in this country that just looks how to extricate money from its inhabitants.