PM backs raising deficit over taxes

Netanyahu sets 2013's State deficit goals at 3%. Move may prevent raising taxes but government will still have to implement lateral cutbacks
Avital Lahav |
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Prime Minister Benjamin Netanyahu decided Tuesday to increase the government's deficit goal for 2013 to 3% - 0.5% over the Treasury's recommendation of 2.5%.
The decision means that the government can suspend the decision to raise VAT rates by 1%. The latter, set to take effect on July 1, would have generated the State an additional NIS 5 billion in revenue.
The Treasury's move to raise the VAT was criticized as yet another blow to the weaker echelons – a perception Netanyahu sought to avoid in the coming election year .
Increasing the deficit may stem several other financial levies the government planned to impose on the public, such as raining income tax and petrol prices .
Increasing the deficit's limits, however, will not exempt the government from implementing a NIS 6.5 billion ($1.65 billion) lateral cut in its budget next year.
Attila Somfalvi contributed to this report
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