Lapid with PM Netanyahu
Photo: Reuters
Finance Minister Yair Lapid's flagship 0% VAT Bill passed its second and third reading in the Knesset's Finance Committee, despite past objections by Prime Minister Netanyahu, thus clearing the way for it to be put to a Knesset vote.
The bill is supposed to exempt young couples from VAT when they purchase their first home. Lack of affordable housing is considered one of the central issues facing Israel's middle class, Lapid's main constituency.
The bill passed the committee by a majority of 10 to 6 as part of an agreement between both the Finance Ministry and the committee, and the government and coalition, tying the bill to the 2015 budget.
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MK Nissan Smolianski (Bayit Yehudi), who heads the committee, managed to negotiate an additional comprise after Tuesday's deliberation ended in stalemate over a number of the bill's clauses.
The central issue was religious MKs from Shas' reluctance to extend the bill's benefits to include young divorcees with children. Thus the Wednesday's vote was only on the bill's core proposal, and did not include the bill in its entirety.
Nonetheless, sources close the Knesset's speaker, who manages the Knesset plenum's vote, which is bill's next stage after clearing the Finance Committee, said that "the bill will not be put to a second and third reading vote in the plenum until the Finance Ministry makes good on its promises regarding the budget."
The opposition has also raised a number of issues, but their main fight at this point it to force the Knesset to vote on each article independently, and not vote on the bill in its entirety.
Among the articles which would be voted on would be expanding the law's timeframe to seven years; expanding the maximum size a property can be to be eligible for the benefit from 140 square meters to 150; as well as a clause limiting the ability of those who did not serve in the army to enjoy the bill's benefits.
At this point the opposition will do everything in its power to postpone the main vote and attempt to forge a united front against the bill, which will most likely pass should it be voted on in full.
According to the Finance Ministry the bill is expected to cost Israel NIS 2 billion.