Ministry of Finance director general Yarom Ariav is formulating more tax reforms, which will come into effect in 2010. They include cuts in income tax, National Insurance levies, and the health tax to a maximum marginal rate of 40%, and a reduction in the companies tax to 20%. The tax cuts will total about NIS 10 billion.
The reform might be brought forward, provided that the economy continues to grow by more than 5% a year and the government has tax surpluses.
The Ariav team is formulating ideas and has already held some meetings, but the new tax reform will not be ready for 2008. Assuming no dramatic security developments with Syria or Iran, the reform might be implemented in 2009.
By 2010, the maximum marginal income tax rate for individuals will be cut from 49% to 44%, and the companies tax rate will be cut from 34% to 25%. In 2008, the average disposable income for wage-earners will increase by NIS 400 per month, on the basis of tax reforms passed by previous finance ministers Silvan Shalom and Benjamin Netanyahu. Low income wage-earners will also seen several hundred shekels a month from the negative income tax.
Published by Globes [online], Israel business news - www.globes.co.il - on September 20, 2007
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