On Wednesday, the Knesset is scheduled to vote on a proposed increase to the purchase tax known as value-added tax (VAT). The VAT hike is just one of several budget changes proposed by Finance Minister Yair Lapid, who argues that the changes are necessary in order to fight the budget deficit.
Labor head MK Shelly Yechimovich, the head of the Opposition, disagrees. She sent a message to MKs on Wednesday morning urging them to vote against the VAT increase.
The VAT hike “is a coward’s tax – don’t approve it, vote against it,” Yechimovich said.
She appealed to members of the coalition to ignore orders on how to vote. “I’m calling to Members of Knesset from Yesh Atid, Hatnua, Likud, Bayit Yehudi and Yisrael Beytenu. All the members of the coalition and the government – use your conscience, your logic, your backbone, your obligation to your voters, and vote today against Lapid’s VAT hike.”
Lapid’s proposed changes will only make the economy worse, she argued. “Lapid’s ‘sources’ [of tax money] are hitting the middle class and the poor, are reducing their purchasing power still further, are hurting small and medium-sized businesses and bringing an economic slow-down,” she warned.
Yechimovich published a list of proposed alternate sources of funding. Her list included: cancelling half of the tax benefits for corporations, which she estimated would add 3 billion shekels to the public purse, implementing the Sheshinski proposal to change royalties fees on natural oil and gas fields, which she estimated would bring in 1.6 billion, and an income tax hike affecting the top 1% of earners alone. A suggestion for a graded VAT that taxes luxury items more than basic foodstuffs was not implemented for lack of time, sources said.