Photo Credit: Abir Sultan / Flash 90
Israeli shekels

Prime Minister Binyamin Netanyahu and Finance Minister Moshe Kahlon announced Thursday they will cut the sales tax (VAT) by one percent and do the same with the corporate tax.

Beginning October 1, the VAT will drop from 18 percent to 17 percent.


The corporate tax will drop from 26.5 percent to 25 percent, starting in January 2016.

It is estimated that the two benefits to consumers will cost the state approximately NIS 6.5 billion ($1.6 billion).

Bank of Israel Governor Karnit Flug, who is not in favor of the plan, immediately announced her criticism of the move.

But in a joint news conference Thursday afternoon, Netanyahu and Kahlon told reporters the move was designed to act as a “growth engine” on an economy that is slowing down.

“We believe in you, we believe in the free market, we believe in freedom,” the prime minister said. “I think this will help growth. I think this will give the economy the boost it needs. At a time when we are hearing about global slowdown, and here too, we want a growth engine and lowering taxes is one of them.”


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Hana Levi Julian is a Middle East news analyst with a degree in Mass Communication and Journalism from Southern Connecticut State University. A past columnist with The Jewish Press and senior editor at Arutz 7, Ms. Julian has written for, and other media outlets, in addition to her years working in broadcast journalism.


  1. This is nonsense. Instead of the plan to sell natural gas to other countries, Israeli leaders could change everything to natural gas. Buses, trucks/trash trucks, cars, no gas bills for Israelis AND then lower the VAT to 9%. Why? All the world's companies would be figthing for the contracts to bring their engines/parts, service contracts to Israel. but FOR CHANGE, you need to fight for it. You cannot sit idly by and let multi millionaire politicos make the decisions for you. They will get their money, but will you save THOUSANDS of NIS or get chump change?

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