Cabinet approves 17% public transport fares cut

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The state will spend NIS 650 million a year in subsidizing the fare reduction.

The cabinet today approved a bill proposed by Minister of Finance Moshe Kahlon and Minister of the Development of the Negev and Galilee Aryeh Deri to reduce public transportation fares by the amount of VAT. In other words, the rates will be cut by 17%. The state will subsidize the cut by transferring NIS 650 million annually to the public transportation operators. In addition, the bill will prevent future changes in fares resulting from changes in VAT.

At the beginning of the cabinet meeting, Prime Minister Benjamin Netanyahu commented on the fares cut, saying, "After we cut electricity and water prices and introduced reform in food, we are now lowering public transportation prices, which also has clear social significance. Those using public transportation tend to be more economically disadvantaged - this is a significant relief for them."

Netanyahu also addressed approval of a multi-year plan for development of Druze and Circassian communities at a cost of NIS 2 billion, and spoke in this context about the gaps between Arabs and Jews in Israel, following the public discourse on the subject in recent days. "Anyone with eyes in his head knows that there are wide gaps between the Arab and Jewish sectors: gaps in resources and gaps in law enforcement, gaps in rights and gaps in duties. These gaps arose over decades, and the time has come for a major national effort to narrow them. In recent years, my governments have invested many resources in the Arab sector, and the unprecedented program approved by the cabinet 10 days ago will do more in this direction," Netanyahu said.

Netanyahu continued, "At the same time, we are implementing a comprehensive plan for law enforcement in the Arab sector. I want to make it clear that nothing done in various spheres - infrastructure, tourism, education, commerce, and the economy - these things cannot go ahead unless we address the question of enforcing Israeli law in the Arab sector. These two programs are interdependent, and will assist and benefit all Israeli citizens, above all the Arab citizens. I believe that anyone who really wants integration of all Israeli citizens in Israeli society will be a partner in this national effort that the government will lead in the coming years."

Commenting on the cut in fares, Kahlon said, "Lowering public transportation fares is a highly important social measure that will continue our struggle to reduce the cost of living in Israel, and above all will aid the economic disadvantaged and the middle class. The solution we found together with Minister Deri enables us to maintain a uniform VAT system and avoid disruptions in the tax system in Israel, while ensuring that the fares cut will endure for many years."

Deri added, "Cutting VAT on public transportation means fulfilling the commitment I took on myself in the election campaign, and will save poor families and those without cars thousands of shekels. This is a major reduction that will be brought up for quick passage by the Knesset in order to make sure that it is not canceled in the coming years."

Published by Globes [online], Israel business news - - on January 10, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

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