The Israeli cabinet has approved a proposal put forward by Finance Minister Silvan Shalom to adjust the tax bracket for low income earners, it was announced on Monday.
The move, which will affect those Israeli taxpayers earning between NIS 3,000 and NIS 4,000 per month, and is set to come into effect in April, is intended to compensate this group for a freeze in the minimum wage.
As a result of the Economic Arrangements Bill, which will accompany the 2002 budget, the minimum wage will be frozen at NIS 3,300 per month in April, meaning that low income earners will miss out on a 1.6% cost-of-living increase to their salaries.
According to the Finance Ministry, the lowest tax bracket of 10%, which is currently imposed on wages above NIS 1,970 a month will from April only be imposed on the portion of monthly wages above NIS 2,500, and the second lowest tax bracket will be adjusted from NIS 3,420 per month to NIS 3,950.
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