Prime Minister Benjamin Netanyahu and Minister of Finance Moshe Kahlon will hold a press conference at 18:15 today at the Prime Minister's Office in Jerusalem to announce tax reductions. They will announce a 1% cut in the VAT rate and a 1.5% cut in companies tax.
In the past few days, the Ministry of Finance has been examining ways of stimulating the economy, among them reducing tax rates while at the same time raising public expenditure.
Yesterday, Kahlon confirmed a report in Hebrew daily "Yediot Ahronot" that he intended to cut the VAT rate to 17%, saying that he would "return to the public" the excess tax that has been collected this year.
Speaking at a conference of the Israel Land Authority, Kahlon said yesterday, "I will present to the prime minister further measures we wish to promote in order to generate growth. The state's tax revenues have been good and there are surpluses of billions of shekels. Surplus tax collections are money that belongs to the public, and so should be returned to it."
Sources inform "Globes" that state tax revenues in August, which have not yet been officially released, were NIS 2.5 billion higher than forecast, a figure than amazed top economic officials. The cumulative surplus is close to NIS 10 billion, although at this stage the Ministry of Finance does not intend to revise its conservative revenue forecasts for 2015 and 2016 in the state budget that will be voted on at first reading this evening. The tax figures have led Kahlon to query the Central Bureau of Statistics showing a slowdown in the Israeli economy in the second quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on September 3, 2015
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