Published On: Thu, Sep 3rd, 2015

Prime Minister Netanyahu and Finance Minister Kahlon Announce Tax Reductions

The entire package of cuts is expected to cost the government some NIS 6.5 billion ($1.6 billion) annually.

Netanyahu and Kahlon

 

Israel’s rate of VAT is to fall to 17 percent and Taxes on companies will also be reduced to 25 percent, Prime Minister Benjamin Netanyahu and Finance Minister Kahlon announced this evening. “In order to encourage growth, ” said Netanyahu.

“We can do this”, said Netanyahu, “because state coffers have accumulated billions in tax surpluses and instead of keeping them in the treasury, we have decided to return them to you, citizens of Israel, and to businesses in the State of Israel.” Prime Minister added, “I think that this will help growth. And will give the exact encouragement that the economy needs. At a time when we hear of a global slowdown, we want a growth engine and lower taxes is one of them.”

Kahlon added, “If we find ourselves in a slowdown or a significant fall in tax receipts, we will have to make a correction, and this correction will be accompanied by complementary measures to restore the situation to where it was.”

Sources inform “Globes” that state tax revenues in August, which have not yet been officially released, were NIS 2.5 billion ($640 million) higher than forecast, a figure than amazed top economic officials. The cumulative surplus is close to NIS 10 billion ($2.66 billion).”

The business website added, “The tax figures have led Kahlon to query the Central Bureau of Statistics showing a slowdown in the Israeli economy in the second quarter.”

“We are taking this move under full control and we are on top of the situation.”, said  Kahlon , “Since 2010, VAT in Israel has only gone up. Today it is starting to change direction and come down.”

 

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