Israel's economy is about to receive another boost, with the cancelation of the customs tax on the import of hundreds of products.Finance Minister Yuval Steinitz signed the order Wednesday to cancel the tax on toys, clothes, electrical appliances such as washing machines, dishwashers, ranges and ovens, sewing machines, tires, medicines and more.
The cancelation goes into effect on January 1, 2012.The decision is expected to cost the State approximately NIS 400 million ($105 million) in tax revenues. It comes as part of the recommendations on tax reductions by the Trachtenberg Committee.
In addition, the Knesset Finance Committee has extended by one year a tax clause that allows the former Jewish residents of Gaza a 20 percent reduction in their income tax.
Also according to the new tax reform measures, Israelis earning between NIS 8,000 to NIS 14,000 a month will pay 2% less income tax. The decrease will reduce state revenues by NIS 1 billion annually.The measures are being implemented against the background of a report submitted Wednesday to President Shimon Peres by the National Council for the Child that said one out of every three children in the Jewish State officially falls into the classification for poverty.
A report issued by the Organization for Economic Cooperation and Development (OECD) earlier this month warned the gap between rich and poor Israelis grew over the past year – and the gap in Israel is one of the highest among OECD members. Israel joined the organization last year.