Milk. Prices going up
Photo: index open
Bread. Now NIS 4.63
Photo: Shaul Golan
VAT rises to 16.5%
Starting Wednesday, consumers will pay more for basic goods, fuel, apartments, cars, and vacations. Eelectric appliances, clothes' prices not expected to see hike – for now
Get your wallets out. Value added tax rose Wednesday morning by 1% from 15.5% to 16.5%. As a result, the prices of many products are expected to increase in the coming days.


The first line of products expected to get more expensive are those with regulated prices, such as white bread, challah, eggs, milk, salt, and butter.


However, the change in price will be relatively small. A loaf of white bread will increase from its current price of NIS 4.59 ($1.17) to NIS 4.63 ($1.18). Sliced white bread will cost NIS 6.94 ($1.77) instead of NIS 6.88 ($1.76).


For fresh 3% milk in a bag, the price will be NIS 4.77 ($1.22) instead of NIS 4.73 ($1.21). A dozen large eggs will cost NIS 12.05 ($3.08) instead of NIS 11.95 ($3.05).


As for other products, the decision to raise their price rests in the hands of each individual shop owner, many of whom have already announced that they will not be re-pricing products. Some of them claim that the 1% price hike does not justify the investment in remarking all the products. Others have announced that they do not intend to boost prices in a bid to attract customers.


Stiff competition keeps prices down

For instance, most electronic appliance chains do not intend to up the price tags on refrigerators, televisions, washing machines, and other appliances. Because of stiff competition among them, the chains are actually planning on increasing their promotions and sales.


Fashion chains, currently holding end of season sales, also are not expected to increase prices.


On the other hand, contractors are expected to raise apartment prices. For instance, a second-hand three-room apartment in Givatayim that is currently priced at NIS 1 million without tax ($255,274.93) or NIS 1.15 million with tax ($294,842.55) will see an additional NIS 10,000 ($2,552.75) tacked on.


Those of us looking to go on vacation in Israel will also be asked to pay more. The Isrotel chain announced Wednesday morning that a two-day stay in one of their hotels will cost an extra NIS 10 ($2.55).


Cars prices stay the same – for now

New family cars are slated to see a relatively small increase in price – about NIS 1,000 ($2,552) on average. The price of luxury cars is expected to increase by about NIS 2,000-3,000 ($510-$766). However, some importers are not planning on updating the prices currently, instead preferring to wait until August when sales tax will increase for expensive, polluting cars.


Chains and stores opting to increase prices are obligated to mark the new price on each product and to ensure that it is identical to the price at the cash register. They will have a week-long grace period to update price markings on products on the shelf on the condition that a clearly visible sign indicating the price increase is situation close to each product.


Fuel prices went up at midnight Tuesday by 21 agorot following changes in the price of oil and the increased VAT. A liter of 95 benzene at a self-service station now costs NIS 6.35 ($1.62) as opposed to the previous NIS 6.14 ($1.57).


Amir Ben-David, Arie Egozi, Zvika Brot, and Ofer Petersburg contributed to this article


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