'Social' Reforms to Raise Taxes NIS 1.4b

Recommendations on tax changes in the Trajtenberg committee's report on socioeconomic change will actually bring in NIS 1.4 billion for the state, treasury officials told the Knesset yesterday.

Implementing the tax reforms recommended by the committee, set up in response to the social protest movement, will raise an additional NIS 3.9 billion next year, while the tax cuts amount to only NIS 2.5 billion, said Foreign Ministry officials at a session of the Knesset Finance Committee discussing the changes.

One reason for the imbalance is the Finance Ministry's decision to delay cuts in employers' contributions to National Insurance Institute payments, which would have cut revenues by another NIS 400 million. Tax cuts proposed for next year, which must be approved by the Knesset, are mostly cuts in indirect taxes such as fuel taxes on gasoline.

Finance Committee MKs asked treasury officials for clarifications on the imbalance between tax cuts and increases at the committee's next meeting scheduled for Monday. The tax increases include canceling scheduled income and corporate tzx cuts; raising taxes on capital gains, interest and dividends; and raising taxes on the highest wage earners.