The Finance Committee Approved the Multi-Year Tax Plan Submitted by the Minister of Finance

Last week, the Finance Committee approved the multi-year tax plan submitted by the Minister of Finance, Benjamin Netanyahu.
 
The Minister of Finance was pleased with the Finance Committee’s decision, which gave a green light for the implementation of the tax reform.  “Every Israeli citizen, especially those in the lower and middle-income classes, will soon pay less taxes, while the cracks that had allowed for large-scale tax evasion will be sealed up.”
 
The Director of the Tax Authority, Eitan Rob, told the Finance Committee that the main goal is to accelerate growth.
 
The main points of the plan include the following:  reducing the tax burden, establishing uniform tax rates in the capital market, encouraging investment in Israel and expanding the tax base.
 
Among the reductions approved are the following:  a reduction of VAT by ½%, as of September 1, 2005; a tax reduction for individuals over the course of a multi-year process beginning in January 2006; an exemption from real estate purchase tax for individual residential units for the amount of NIS 550,000, in a temporary provision which will be in force from July 1, 2005 through the end of 2007; and a reduction of land appreciation tax from 25% to 20%, beginning in January 2006.
 
The Minister of Finance has agreed to the request of Knesset Member Erdan for an increase of an additional 20% in the tax exemption for pensioners and the handicapped regarding income from interest on savings.