At a special conference today, Minister of Finance Ronnie Bar-On presented a multi-year tax cutting plan to be implemented between 2009 and 2015. At the same time, various tax exemptions will also be abolished.
The top marginal income tax rate will be cut from the current 47%, to 46% in 2009, and then to 42% in 2015. The company tax rate will be cut from the current 27%, to 25% next year, and to 20% in 2014.
Beginning in 2009, the income tax exemption on advanced training funds will be abolished. The exemptions on National Insurance levies and the health tax will stay in place.
The income tax cuts are skewed towards low-income wage earners. The marginal income tax for an employee earning a gross month salary of NIS 7,810-11,720 will fall from 26% today to 23% in 2009 and 17% in 2015. The marginal income tax for an employee earning a gross month salary of NIS 4,390-7,810 will fall from 16% today to 13% in 2009 and 10% in 2015. In contrast, the marginal income tax for an employee earning a gross month salary of more than NIS 36,760 will fall from 47% today to 46% in 2009 and 42% in 2015.
Bar-On said that Prime Minister Ehud Olmert and Governor of the Bank of Israel Prof. Stanley Fischer were updated about the plan. He added that he would submit it to the cabinet soon.
Published by Globes [online], Israel business news - www.globes-online.com - on June 11, 2008
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