Knesset Finance Committee chairman MK Moshe Gafni (United Torah Judaism) has forced Minister of Finance Yuval Steinitz to postpone the VAT hike, approved by the cabinet yesterday, from August 1 to September 1.
In yesterday's 20:9 vote, the cabinet approved the fiscal package of tax hikes and budget cuts, including raising VAT from 16% to 17%. The tax hike was due to come into effect tonight at midnight, August 1.
Each month of delay in instituting the VAT hike will cost an estimated NIS 370 million in revenues.
Gafni was infuriated about how he was notified about the fiscal package, and said that he wants to convene the Finance Committee before the decision, so that it would have enough time to discuss the package.
The Ministry of Finance said, "Postponing the VAT hike will give businesses time to prepare and update their accounting systems."
The postponement in the VAT hike, will ease tonight's price hike for gasoline, which will rise by NIS 0.40 per liter, now that the NIS 0.06 increase caused by the VAT hike will not take place.
Published by Globes [online], Israel business news - www.globes-online.com - on July 31, 2012
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