The Knesset today rejected a private member's bill by MK Yoel Hasson (Kadima) to abolish VAT on the purchase of a first home. The vote was 40:25.
In the Knesset plenum, Hasson lambasted Prime Minister Benjamin Netanyahu and Minister of Finance Yuval Steinitz. Steinitz replied that there was no justification or feasibility for the measure.
Hasson criticized Netanyahu's plan for speeding up the construction of thousands of apartments over the next 18 months, saying, "This plan will never be implemented. Netanyahu did not agree on it with anyone, and it was made without coordinating or asking anyone. There are a lot of opponents."
The Ministry of Finance completely opposes cancelling VAT on the purchase of a first home. Steinitz said, "In Israel, there is a uniform VAT on everything, except for fruits and vegetables. This is a huge economic advantage, and the OECD recommends it for the entire world. Cancelling VAT on apartments will severely harm the tax regime, and cost the state NIS 400 million a year. Is this justified? What will we forego? Welfare, education, or defense?"
Published by Globes [online], Israel business news - www.globes-online.com - on March 9, 2011
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