Business in Brief


Treasury plans to lift VAT exemption for tourists

Spreading the burden equally apparently applies to tourists, too: Finance Minister Yair Lapid intends to cancel the value-added tax exemption currently in place for tourists. The move is likely to bring another NIS 300 million to NIS 500 million into state coffers. Currently, tourists pay no VAT on hotel stays or related services, transport, car rentals or large purchases. The policy has been in place for several years. There were previous attempts to drop this exemption, which not all Western nations offer. However, the initiatives were abandoned amid arguments that this would discourage tourism, as Israel is already an expensive country for tourists. However, the government is desperately looking for ways to cut the national budget and boost revenues, and tourists don’t vote. ‏(Moti Bassok‏)

Jobs program for Haredi men shows results

Some 70% of ultra-Orthodox men who served in the army under a special program went on to join the labor force, found a report conducted by the Industry, Trade and Labor Ministry. Before being drafted, only 34% of these men worked. The report looked at 270 men who participated in the Shahar program, which incorporates vocational training with army service, in 2010 and 2011. Shahar program graduates earned an average monthly salary of NIS 6,250. Some 26% went on to find jobs in banking and financial services; only 7.5% worked in these sectors prior to their service. The program attracts men who are interested in joining the workforce in any case, which may signal that pushing Haredi men to serve in the army isn’t enough to get them to abandon full-time yeshiva studies in order to work. ‏(Hila Weissberg‏)

National debt grows, but not relative to GDP

Israel’s national debt increased last year, but its ratio relative to the total gross domestic product decreased to 73.2%, 0.9% less than it was in 2011, reported the financial division of the Finance Ministry’s Accountant General’s office in an annual report released yesterday. Debt to GDP is considered an important indicator of a country’s financial management and well-being. Once debts to local authorities were subtracted from the total, the debt-to-GDP ratio stood at 71.8%, which is 0.8% less than in 2011. Total government debt was NIS 666.8 billion, 5% more than it was at the end of 2011. ‏(Moti Bassok‏)

Own an old A/C? The state will help replace it

You replaced your fridge with help from the state, and now it’s time for that old air conditioner to go, too: The Energy Ministry is launching an initiative to subsidize the purchase of new, energy-efficient air conditioners for people with old energy guzzlers. The move is expected to save 50 million kilowatt-hours of electricity a year, a significant amount given that the power utility is struggling to meet summer demand. Under the program, 45,000 air conditioners with an energy rating of A or B will be offered for between NIS 1,490 and NIS 2,962, which is NIS 800 to NIS 1,800 less than the usual sales price. The project is expected to cost the state NIS 50 million, which will come out of the ministry’s budget for reducing greenhouse gas emissions. Ministry sources said people who replace old energy guzzlers will save twice − a new machine will save them an estimated NIS 700 a year in electricity costs. In order to be eligible, you have to have an air conditioner that is at least seven years old, plugged in and in working order. The price includes the removal of the old unit and the installation of a new one. ‏(Itai Trilnick‏)

Finance Minister Yair Lapid.Credit: Daniel Bar-On



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