The austerity measures in the 2013 budget proposed by the Ministry of Finance will cost the average Israeli family NIS 650 a month, or NIS 7,800 a year - almost equal to the average gross monthly salary, according to a preliminary analysis by Ayalon Investment House.
Minister of Finance Yair Lapid today sent the budget proposal for 2013-14 to the cabinet. It includes raising the marginal income tax rate by 1.5 percentage points, beginning in 2014, raising VAT from 17% to 18%, raising the companies tax rate from 25% to 26%, raising cigarette and alcohol taxes, and more taxes on housing.
Ayalon calculates the effect of the austerity measures on an average family with three children (who receive child allowance), in which both parents earn the average gross national monthly salary (which the Central Bureau of Statistics states was NIS 9,048 in February).
The calculation takes the following measures into account:
"Bottom line, the average family will lose one of the parent's entire salary for a month. This is a serious blow to the middle class, which will have to calculate the figure in shekels in order to decide what it will have to forego in the foreseeable future," says Ayalon Group chief strategist Yaniv Pagot.
Published by Globes [online], Israel business news - www.globes-online.com - on May 7, 2013
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