VAT to be cut from 17% to 16.5% as of September

The Knesset ( Parliament ) Finance Committee agreed last week to lower VAT from 17% to 16.5%, starting from September 1, 2005.
 
The VAT cut is part of a broader policy designed by the former finance minister, Benjamin Netanyahu, who resigned last Sunday. Prior to his resignation Netanyahu planned to include cuts to corporate tax and tax on work.
 
Boaz Soffer, the senior deputy director (general finance and development) at the Tax Authority, explained the Finance Committee that indirect tax in Israel is too high, hence the half-percent tax cut would be a step in the right direction.
 
Soffer added that the Finance Ministry means to reduce value added tax to 16% from January 1, 2007.