After a shorter than expected discussion, Prime Minister Ariel Sharon and Minister of Finance Silvan Shalom approved the NIS 13 billion emergency economic plan tonight. They will present it to the heads of the coalition parties tomorrow (Wednesday).
It is believed that the cabinet will approve the plan by a large majority on Sunday, and the plan will be submitted for Knesset approval the next day. Opposition in the government to the cuts in spending and allowances will probably be less than anticipated.
Measures for taxing the capital market are possible, together with the approval of the plan. A precedent for taxing large financial assets, supported by the consensus of the Rabinovitch tax reform committee, is also possible.
Ministry of Finance director general Ohad Marani said today, "It is very possible that the Minister of Finance may make an announcement concerning a tax on the capital market." On the other hand, the Ministry of Finance officially announced, "No decision has been taken in the matter. The issue will be discussed in the context of the Rabinovitch committee."
The key features of the emergency plan are a 1% rise in VAT and higher taxes on cigarettes and fuel. Also under consideration are levying VAT on fruits and vegetables, formerly exempt, which would raise NIS 750 million.
Published by Globes [online] - www.globes.co.il - on April 23, 2002