Israeli Prime Minister Ariel Sharon approved Tuesday, April 23, an economic emergency plan formulated by the Finance Ministry, aiming to cut around 13 billion Israeli shekels ($2.7 billion) off the nation’s budget deficit. The austerity scheme calls for a one percent increase in value added tax (VAT) to 18 percent, as well as the imposition of taxes on savings and on stock market profits.
The proposal also includes a salary freeze of both public and private sector wages, a rise in fuel and cigarette taxes and a cut in family allowances. In addition, some $250 million are to be cut from ministerial budgets. The plan is pending the approval of the Israeli parliament (Knesset). Opposing the emergency measures are the religious and Arab parties, as well as the Histradut trade union federation.
Soaring military spending compounded by lower tax revenues are anticipated to raise the state budget deficit up to 25 billion new Israeli shekels ($5.1 billion) in 2002, according to the central bank’s revised estimates. — (menareport.com)
© 2002 Mena Report (www.menareport.com )