Prime Minister Benjamin Netanyahu and Minister of Finance Yuval Steinitz today agreed with Knesset Labor, Welfare and Health Committee chairman MK Haim Katz (Likud) to cancel the planned income tax hike on the third tax bracket of NIS 8,881-14,400 a month. Instead, they lowered the fourth and fifth tax brackets, with the result that the blow to the middle class will be even greater.
The Ministry of Finance will lower the fourth tax bracket threshold, which pays 31%, from NIS 14,400 to NIS 14,000. The fifth income tax threshold on which 34% is paid will be lowered from NIS 21,800 to NIS 20,000.
The Knesset plenum convened today for a special recess session to hold the three votes on the government's fiscal package, which includes a VAT hike of one percentage point to 17%. The first vote is scheduled for this afternoon, after which the Knesset Finance Committee will meet on the package, before sending it back to the plenum for the second and third votes tonight.
Published by Globes [online], Israel business news - www.globes-online.com - on August 6, 2012
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