VAT hike comes into force; fuel price also rises

VAT rose by 1% to 18% at midnight last night.

This week opens with a wave of price hikes. Last night at midnight, VAT rose by 1%, raising the prices of goods in Israel, from chewing gum to cars. In addition, after being reduced in two consecutive months, the price of self-service 95 octane gasoline rose today to NIS 7.52 per liter.

After a stormy public and Knesset debate, the VAT hike to 18% came into effect at midnight. The immediate effect was felt at the stores this morning. The only people unaffected by the hike are residents of Eilat and tourists in the city, who will continue to be exempt from VAT.

In addition to the VAT hike, the price of gasoline went up, after falling in the two preceding months. The price of self-service 95-octane gasoline rose by 0.26 per liter to NIS 7.52 per liter. The price hike is due to measures by the Bank of Israel, which stemmed the appreciation of the shekel against the dollar, raising the price of fuel purchased overseas.

Published by Globes [online], Israel business news - - on June 2, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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