The Cabinet voted to increase the VAT tax and income taxes on some segments of the population in light of a projected budget shortfall. The Knesset still needs to discuss it.
According to Israel Hayom:
The new measures include raising income tax by 1 percentage point on monthly salaries exceeding the national average of 8,881 shekels ($2,198) in 2013. Taxes on monthly salaries of over 67,000 shekels will go up 2 percentage points. Income tax rates in Israel range from 10% to 48%.Value added tax is also set to rise to 17% from 16% on Aug. 1, most government ministries' budgets will be trimmed by 5% and the tax authority will be cracking down on tax evaders to collect billions of shekels. Finance Minister Yuval Steinitz also ordered immediate tax hikes on cigarettes and beer, which went into effect last week.
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