At the end of a stormy debate, the Knesset plenum approved the 1% rise in value added tax (VAT). From next week, VAT will be 18%. 45 Knesset members voted in favor, and 32 against.

Minister of Finance Yair Lapid, who left the Knesset because of an overseas trip and was not present at the vote, drew fire from both opposition and coalition mebers.MK Moshe Gafni (United Torah Judaism) said, "This is going to hit the middle classes and the poorer members of society hard, indiscriminately. They are doing this aggressively without talking about an economic plan and without discussing alternatives. There are good alternatives. A senior official at the Ministtry of finance told me, 'We got a sucker at the Finance Ministry, and we're exploiting it to the end'."

MK Itzik Shmuli (Labor) said, "There are thousands of poor children in Israel, and now the National Insurance Institute finds that they will be joined by 45,000 more who will sink below the poverty line."

Published by Globes [online], Israel business news - www.globes-online.com - on May 29, 2013

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