The Knesset is advancing a bill to lower the VAT rate from 18% to 17%, a move promoted by opposition lawmakers as a measure to ease the cost of living. Proponents argue the cut will benefit consumers via reduced supermarket prices, though some note enforcement is needed to ensure retailers pass on the savings.
The Knesset is advancing a bill to reduce the VAT rate from 18% to 17%, as opposition lawmakers focus their efforts on lowering the cost of living ahead of a potential dissolution of the Knesset. The bill was submitted alongside proposals to enforce retailer compliance, ensuring supermarkets pass the tax cut on to consumers — a pattern some lawmakers note was absent during recent dollar-linked price movements. As The Zioneer reported, the Finance Ministry and Tax Authority previously opposed a similar cut, estimating an annual revenue loss of 8.5 billion shekels with minimal benefit to the average consumer. The final vote and coalition alignment remain open.
2 developments
- DevelopingEconomic commentator argues direct distribution would be more efficient than a VAT cut
- DevelopingKnesset panel presses Finance Ministry over food prices that ignored dollar's fall
- StrongAnnual inflation steadies at 1.9% after governor signals rate-cut easing
- DevelopingLikud advancing bill to grant tax benefits to Be'er Sheva residents at 600 million shekels annual cost
Source and signal
- Internal intake