An economic commentator argues that cutting VAT to 17% would cost about 8 billion shekels a year, and that distributing the same sum directly to consumers and self-employed workers through tax reforms or other means would be more economically efficient. The comment comes as the Knesset advances a bill to lower VAT from 18% to 17% in an effort to ease the cost of living.
An economic commentator argued Sunday that the government's proposed VAT reduction from 18% to 17% would cost roughly 8 billion shekels annually, asserting that a direct distribution of that sum to the public — through tax bracket cuts or other reforms — would be more economically beneficial. The commentator noted that the government prefers a VAT cut because it is more recognizable to voters at the ballot box.
The comment comes as the Knesset advances a bill to lower the VAT rate, as The Zioneer reported earlier on Sunday. The bill is promoted by opposition lawmakers as a measure to ease the cost of living, though some have noted that enforcement is needed to ensure retailers pass on savings to consumers.
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