The net pay of workers earning up to NIS 7,000 monthly will be increased by tens of shekels. The government today approved Minister of Finance Benjamin Netanyahu’s proposal on the matter.
The NIS 650 million measure is designed to compensate low-paid workers, whose net wages were reduced at the beginning of 2004 by a similar amount by the recent downward revision of tax brackets and tax credit points. Linkage to negative inflation was the cause of the revision.
This is not, however, the large-scale plan being formed by Ministry of Finance director general Dr. Joseph Bachar and Accountant General Dr. Yaron Zalika for increasing the net pay of people earning NIS 3,000-8,000 per month, considered to be in the low and middle income brackets, by NIS 150-300 per month. This plan will be ready only in another three months.
Today’s measure proves that when Netanyahu wants to, he can put economic measures through quickly, even after a short debate covering a single weekend. Approval of the measure will help him repel the criticism that followed the downward revision of the tax brackets and tax credit points.
The cabinet decided to amend Section 121 of the Income Tax Ordinance - Revised (1961) to change the tax brackets and cut the income tax on labor for the low and middle income brackets by a total of NIS 650 million.
The decision authorizes the ministerial legislative committee, headed by Minister of Justice Joseph (Tomy) Lapid, to approve the draft bill drawn up according to the cabinet proposal, and place it on the Knesset agenda immediately. No new salary table was attached to the cabinet decision.
Published by Globes [online] - www.globes.co.il - on January 11, 2004