PM promises 0% VAT on basic foods

Benjamin Netanyahu

Benjamin Netanyahu told the "Globes" Israel Business Conference that 0% VAT on homes would only have helped the middle class.

Prime Minister Benjamin Netanyahu promised to exempt basic products from VAT and double the grant to discharged soldiers - instead of the 0% VAT that had been planned for young couples buying first-time new homes. Netanyahu was speaking at the "Globes" 2014 Israel Business Conference this morning, where to all intents and purposes he kicked off his election campaign.

He said, "I was no disciple of the 0% VAT plan. I thought it was a law that could distort the housing market and cause prices to rise. You give benefits on housing but it's not a product that can be supervised, so you can therefore take the benefits and put up the price, and the benefit doesn't reach the consumer. 0% VAT on apartments was a benefit that would have been given to between 9,000 and 14,000 people at most. Generally we're speaking about people from comfortably-off families that can afford to pay hundreds of thousands of shekels. These families would have received a benefit of NIS 200,000. There's no logic to it."

Instead Netanyahu presented another plan. "He said, "There is an alternative plan. And that is zero VAT on basic food products under supervision, and that is a benefit that will reach millions of people. That is the most basic need of most people - bread, milk, eggs. This plan will let us save hundreds of thousands of shekels a year. It means an immediate 15% reduction in the price of supervised foods and all this reduction will reach consumers, and the more disadvantaged a family is, then the more significant is the saving. That's social justice."

He continued, "It helps the disadvantaged and that is social justice. It will cost NIS 2 billion and not the NIS 3 billion of 0% VAT on apartments. The remaining billion shekels, we will invest in discharged soldiers by doubling their discharge grant to NIS 60,000, an amount that will help young people to begin their lives because that's just. They gave years that they could have been earning money to the State. It indicates to young people that the country wants them."

He concluded, "Instead of 0% VAT on apartments, I pledge to bring the 0% VAT bill on food products and to double the money for discharged soldiers. That's social justice."

Published by Globes [online], Israel business news - www.globes-online.com - on December 8, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

Benjamin Netanyahu
Benjamin Netanyahu
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