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Budget Cuts: Tax on Vegetables, Child Payments Slashed

Government plans cuts to keep deficit under control. How will cuts impact average Israeli?
By Maayana Miskin
First Publish: 4/22/2013, 11:02 PM

 Israeli Shekels
Israeli Shekels
Israel news photo

The government is planning budget cuts to keep the deficit under control despite the global recession. Reports Monday revealed how the cuts will affect Israeli citizens.

The Value Added Tax (VAT) is to increase to 18%, and VAT will be added to the price of fruits and vegetables.

Public sector employees may face salary cuts and taxes on their employer savings plans (keren hishtalmut).

Child payments will drop to 150 shekels per child per month, a change that will mean hundreds of shekels less per month for families with four or more children.

The government is also planning to cut spending on the expansion of the train line, and will slash the defense budget by 3 billion shekels.

On Monday morning Minister of Trade and Labor Naftali Bennett unveiled a plan to reduce prices of some basic goods by increasing competition. Altering Israeli standards of approval for various goods to match European standards could allow for much lower prices for several products, he said, including sunglasses, shoes, laundry detergent, sinks, children’s games, and bicycles.