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May 22, 2012

VAT Might Increase in July

And the cost of living is about to get more expensive again. With the prices of electricity regularly increasing, with the cost of gas at just under it's all-time high, with the cost of many consumer items regularly increasing (perhaps due to sanctions on Iran), news like this is not something one wants to read.

The Ministry of Finance wants to, and is expected to receive approval fairly easily especially because it does not require approval from the Knesset, raise the VAT tax as of the beginning of July. While it currently sits at 16%, the Finance Ministry wants to raise it to 17% in order to add another 2 billion shekels to its coffers in advance of what looks like a weak forecast for next year. And it would add another 4 billion shekels in 2013.

In 2009 the VAT tax was increased from 15.5% to 16.5%, and then in 2010 it was lowered to 16%. It was supposed to be lowered further in 2011 back down to 15.5%, but it was not. And now they want to increase it up to 17%. As well, there might be other tax hikes as well, but the VAT increase is the easiest for them to approve. (source: TheMarker)

I guess if you are planning any big purchases, you might prefer to make them sooner rather than later.

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1 comment:

  1. I read that they also want to add VAT to fruits and vegetables...


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