Top Ministry of Finance officials have been holding intensive discussions in the past few days concerning the desire of Minister of Finance Moshe Kahlon to present an economic growth plan alongside the state budget, Channel 2 News reports. Kahlon decided to formulate such a plan because of the recent negative data on the state of Israel's economy.
As reported by "Globes", a focus of the plan is reductions in companies tax and income tax. The income cuts are planned to apply to monthly incomes up to the NIS 12,000-13,000 bracket. The aim is to alleviate the tax burden mainly for low and middle wage earners. The tax cuts are at present under discussion and no final decision has yet been made on the matter, but Kahlon is determined to go ahead with at least one of the cuts.
This is surprising given the economic background of the past few months. Ministry of Finance officials have been talking of a budget shortfall of at least NIS 12 billion and of the need to cut government spending further, but Kahlon believes that the actual figures are better.
State tax revenues were higher than expected last month, but, beyond that, Kahlon believes that the government needs to institute substantial measures to stimulate economic growth.
It may well be that Ministry of Finance officials are not enthusiastic about Kahlon's plan, and they will probably advise him to wait before implementing it, but it is likely that in the next few weeks we shall hear about an official tax cutting plan.
Published by Globes [online], Israel business news - www.globes-online.com - on July 11, 2016
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