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Israel's Netanyahu Seeks Re-election With Food VAT Break

by Lorys Charalambous, Tax-News.com, Cyprus

11 December 2014


Israel's Prime Minister, Benjamin Netanyahu, has unveiled a proposal to remove value-added tax on basic foodstuffs.

The proposal, announced at a recent business event organized by the publication Globes, is intended to garner support for his majority Likud Party in elections that are now expected to be held in mid-March, after lawmakers voted unanimously to dissolve the nation's Parliament on December 8.

Netanyahu has sought to contrast his policy with that of the former Coalition's Finance Minister, Yair Lapid, of the minority Yesh Atid Party, for the introduction of a zero-rate on the first-time purchase of housing for couples with children. These proposals were controversial, as they were to provide tax breaks to few taxpayers, with numerous restrictions on who would be eligible, and there were concerns also that the measure would exacerbate the shortage of affordable housing.

Opposition parties have proposed clubbing together to form another multipartite coalition, to prevent Netanyahu and his Likud Party from securing another term in office. Netanyahu promoted his plan to remove VAT on food by saying that persons on low incomes would benefit most. Lapid dismissed his plan as a populist election tactic, questioning why he had not pushed the plan until election time.

TAGS: Finance | VAT rates | tax | business | value added tax (VAT) | law | Israel | food | tax breaks | services | VAT goods & services classification

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