Government Takes VAT Down a Point

YERUSHALAYIM -
Prime Minister Binyamin Netanyahu and Finance Minister Moshe Kahlon at a press conference to announce tax breaks on Thursday. (Hadas Parush/Flash90)
Prime Minister Binyamin Netanyahu and Finance Minister Moshe Kahlon at a press conference to announce tax breaks on Thursday. (Hadas Parush/Flash90)

Israeli citizens were given a tax break on Thursday. Prime Minister Binyamin Netanyahu and Finance Minister Moshe Kahlon held a special press conference to announce the good news.

They said that the value-added tax (VAT), a general surtax on goods and services, will be reduced from 18 percent to 17 percent, and taxes on businesses will also be scaled down from 26.5 percent to 25 percent.

The total package is expected to cost the government some 6.5 billion shekels a year.

The official generosity was attributed to the fact that the state deficit turned out to be less than had been projected. In July, the deficit stood at 2.1 percent of GDP, after it had been targeted for the year as a whole at 2.9 percent. The unexpected 0.8 percent of GDP amounts to about NIS 8 billion.