May 28, 2013

VAT increase almost desecrated the Shabbos

As part of the "reforms" passed by the Finance Ministry, the VAT will be going up on June 1 from 17% to 18%.

Does anybody remember when it was actually dropped a few years ago from 16% to 15.5% with a timetable of it being lowered even further in the following years? Since then it was raised back to 16%, then 17% and now it is being raised to 18%.

By law, when the VAT is changed, prices must be updated immediately. That means on June 1, at midnight, all stores must have already, by law, updated the pricing of the products on their shelves.

The problem is that Friday is May 31, and Shabbos is June 1. That means, according to the law, there will be a lot of chilul shabbos involved in the changing of the prices this week. Stores will have to hire extra employees to work Friday night to change all the prices in time for midnight.

MK Nissan Slomiansky (Habayit Hayehudi) realized the problem and petitioned the Finance Minister to therefore postpone the VAT increase to June 2, in order to avoid potentially mass chillul shabbos. Lapid agreed, and the VAT increase was delayed by a day.
(source: Israel Hayom)

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  1. It's not really an issue about changing prices immediately. The business is paying the new VAT on all sales from that time whether they increase the prices. I noticed last time at Rami Levy that he boosted a lot of prices. Our ketchup went up from 7.99 to 8.07. Seems weird from a marketing standpoint, but eventually, the prices were adjusted back on that and other products. Many businesses simply do not bother changing prices on hundreds and thousands of products and just accept the difference when they report their taxes each month.

  2. the original article said the law is the issue..

    if you are correct, that is a big loss they are taking by payng out of pocket. also, in a big store where profit margins are often lower, and they live on volume, this would be a big hit.

  3. He should have asked for it to be implemented on Monday 3rd June, as stores that are not normally open on Shabbat might ask their employees to come in for a few hours on Shabbat to adjust the prices. But glad that he got Lapid to change it anyway.


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