Two important economic plans that were supposed to have been implemented by the new government in Israel look like being shelved.
Hebrew daily "Yediot Ahronot" reports this morning that senior Ministry of Finance officials have told the new Minister of Finance, Moshe Kahlon, that it is not technically feasible to impose an estate tax on inheritances in Israel, and that setting a zero VAT rate on basic food products will be problematic.
On estate tax, a senior Ministry of Finance source said that Kahlon himself seemed to be persuaded that such a tax should not be introduced. The minister was told that it would require many new employees and large resources to implement the tax. "Revenues from the tax will be fairly low, and huge investment will be required in order to apply it," the source said.
On the idea of setting a zero VAT rate for basic food products such as bread and milk, the source said, "There is no way of setting such a rate or of supervising the operation of different rates of VAT, which in any case does not benefit the poorer classes."
Published by Globes [online], Israel business news - www.globes-online.com - on May 25, 2015
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