Israeli VAT tax went up 1% to 18% on Saturday night. It’s now at its highest level in a decade. The government expects the tax hike will raise an additional NIS 4.4 billion a year in revenue, assuming the economy stays strong.
The price of gasoline also rose to NIS 7.52 for 95 octane. This is due to the rising price of imported gas.
The government found itself in a large deficit for two primary reasons.
It bet again on the viability of implementing a two year fiscal plan, but that didn’t work out as well as it did the first time around, when costs were higher, and revenue was lower than expected.
The second reason is that the government gave money away in the form of free dental care for children, free nursery school, and other perks, in response to the summer social protests, and now it has to pay for the debt those perks incurred.
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