Prime Minister Binyamin Netanyahu on Monday morning capitulated, announcing he is withdrawing the planned 16.5% value added tax on fruits and vegetables. Opponents to the move, spearheaded by chareidi MKs insisted such a tax would have a disastrous impact on large and low-income families, lobbying in earnest to thwart the planned tax.

While consumers may be celebrating, the scene among treasury officials is somewhat more solemn, asking just how the prime minister plan to fill the NIS 1.8 billion hole that now exists in the state budget since the VAT revenue is no longer relevant.

Shas leader Interior Minister Eli Yishai was an ardent opponent of the plan, insisting it would deliver a devastating blow to lower-income and large families, adding such a move would be a gross violation of coalition agreements as well as “crossing a red line”.

(Yechiel Spira – YWN Israel)