The Finance Minister and cabinet have agreed to lower value added tax (VAT) from 18% to 17%, and Chairman of the Knesset Finance Committee Moshe Gafne gave the required final approval. The matter must now be approved by Knesset, which is a formality since the coalition and some of the opposition will approve the move.
However the committee did not let the issue pass quietly, calling on Finance Minister Director-General Shai Babad to explain. Gafne wants to understand how suddenly the state has a surplus of tax revenue, so much so it has decided to lower the VAT tax by a percent. Gafne stated “I do not understand how the budget is working. It is not acceptable that a state budget is presented and then two days later the VAT is lowered. I am not even going to address the lowering of taxes on beer and alcohol. We were forced to compromise on our demands regarding monthly child allowance payments because the Finance Minister said there is no money. Now there is NIS 2 billion plus and we were told there isn’t money. Suddenly there is so much money”.
Babad joined the meeting of the Knesset Finance Committee and Gafne said “You guys are not alone in the world. You must bring us your decisions when they are ready. I cannot address my colleagues without having answers”.
Opposition MK Ariel Margalit, who serves on the Finance Committee, is calling on Gafne not to hold discussion on the state budget and the VAT until Finance Minister Moshe Kahlon comes before the committee and explains many things regarding the state budget.
Kahlon was supposed to appear before the committee last week but canceled at the last moment. Now Gafne is angry because the committee is asked to approve paragraphs of the state budget without really getting the entire picture and the pertinent details.
Nevertheless, Gafne calls on committee members to give the necessary backing for if not, the matters will be delayed until after the Yomim Tovim.
(YWN – Israel Desk, Jerusalem)
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5 Responses
This is small change .
The tycoons are already preparing for a second round,
to grab for “poor hard work” billions $ more of the offshore oil.
Time for truth, you sound like the perfect communist. You really think that the ones who risked their money to explore for oil shouldn’t get to reap the fruits of their labor? This is besides for the confiscatory taxes of 60% they must pay. Let the government argue and backstab a little longer and everyone will buy from Egypt. I’m sure you’ll be happy. Better no one should get than those who work get a little more.
Transparency…in government is essential.
Where is the surplus $$ from?
Gafne stated “I do not understand how the budget is working.”
Herein lies a big problem, especially for someone who is the Finance Committee Chair.
Zionflag: Why don’t you join Gafne and take some classes in economics.
When taxes are lowered, people have more money and they spend more money. That spurs growth in the economy and results in greater tax revenue. It works all the time. The problem usually comes when politicians spend multiples of the additional revenue creating deficits.
The issue here, is that 1% is nothing, making the tax cut virtually meaningless.
They did a good job belt-tightening. It’s not a perfect science. Better a surplus than a short fall. Now they are going to distribute the surplus. Sounds good to me. It’s a one percent cut on an 18% tax, big deal. Gafne has to get used to the idea that the government will distribute This money many different ways. Lowering the tax on beer and whiskey makes a lot of sense. This will make a happier electorate all around. Ultimately the Hareidim benefit from this. Less votes for Lapid and Lieberman.