The Ministerial Committee for Legislation is expected to meet today (Sunday) to discuss a bill to reduce the value-added tax (VAT) rate in the economy from 18% to 17%.
The social initiative is led by United Torah Judaism chairman MK Yitzhak Goldknopf, together with the chairman of the Finance Committee and additional Knesset members from both the coalition and the opposition, who have decided to join forces in the fight against the rising cost of living.
This is a significant economic step intended to create a direct brake on the many price increases in the economy, which have placed a heavy burden on Israeli households in recent years and have sharply intensified since the outbreak of the war.
Unlike targeted grants, the bill seeks to implement a broad reduction in the indirect tax paid on almost every product and service in the country, thereby providing immediate and noticeable financial relief to all citizens-especially large families who regularly bear high living expenses.
In the explanatory notes attached to the bill, the social principle underlying the move is clarified: the value-added tax is currently imposed uniformly on all consumers without distinguishing between high-income and low-income earners.
As a result, the practical implication is that the tax burden is not equal; large families and those with limited means, who consume a greater quantity of essential goods such as food, clothing, transportation, and basic services, are most affected by every percentage point of VAT and pay significantly higher amounts each month in overall financial burden.
“At a time when many families are dealing with a heavy cost of living and constant price increases, it is the government’s duty to do everything possible to ease the burden on the public," said United Torah Judaism chairman MK Yitzhak Goldknopf ahead of the decisive committee discussion.
He added: “Reducing VAT is a necessary step that will provide immediate relief to every family in Israel, especially large families carrying a heavy financial burden. We will continue to act by all available means for the welfare of Israeli families and to reduce the cost of living."