The ministerial legislative committee is scheduled to approve the tax cuts plan tonight.
The political dispute between Minister of Finance Benjamin Netanyahu and Prime Minister Ariel Sharon over the disengagement plan, and the preliminary Knesset vote on a proposal by MK Zevulun Orlev (National Religious Party) to postpone disengagement from the Gaza Strip, are liable to delay implementation of the tax plan.
The full Knesset Finance Committee is scheduled to discuss the tax plan from tomorrow, after the ministerial legislative committee, headed by Minister of Justice Tzipi Livni, approves Netanyahu’s NIS 11.3 billion comprehensive reform of taxes through 2010.
The plan cuts VAT by 0.5% to 16.5% as of September 1, and by a further 0.5% to 16% in July 2006 or January 2007. The plan also features a gradual reduction in corporate tax and individual income tax through 2010, combined with hikes in taxes on capital gains and savings.
NIS 2 billion in tax cuts are scheduled for 2006. The tax plan is the main growth engine for the economy in 2006, and is designed to boost growth to at least 3.9%, thereby preventing growth from slowing to less than 3.5%.
Published by Globes [online] - www.globes.co.il - on July 3, 2005