Sharon OK's tax reduction plan
Finance Minister Netanyahu says plan to reduce business, income, added-value taxes 'imperative for market growth'
Prime Minister Ariel Sharon approved Finance Minister Benjamin Netanyahu's tax reduction plan Thursday.
Netanyahu is expected to submit his plan for government approval on June 15, after which it would also be presented to the Knesset's Finance Committee for approval.
The plan encompasses reductions in business, property, income, and value-added taxes:
• The income tax reduction will be for those making relatively little money.
• The business tax reduction will start at two percent this year and reach 24 percent by 2010.
• There will be a capital gains tax increase from stock market profits of 10-15 percent, as opposed to the current range of 15-20 percent
• The value-added tax will be reduced from 17 to 16 percent.
• There will be a reduction of real estate taxes and in the maximum rate of income tax, from 49 to 45 percent.
Plan key in ensuring standard of living
"Part of the plan will be implemented this year, such as the reduction of the value-added tax by 0.5 percent, as we are careful and are keeping within the budget's framework," Netanyahu told reporters following his meeting with Sharon.
He said the Finance Ministry is formulating financial maneuvers that would support the lower classes, and added that he was in complete agreement with prime minister and Bank of Israel Governor Stanley Fischer regarding the economic plan, "as we all understand the tax reductions are necessary in order for us to accomplish our market-growth objectives."
"The plan is imperative for the market's growth, as without growth we cannot reduce unemployment and cannot receive the budgets necessary to carry out our plans," Netanyahu said. "This is the key to ensuring the citizens' standard of living."
