Israel's Finance Ministry Proposes Reforms to Address Budget Deficit
A new four-year economic plan by Israel's Finance Ministry aims to reduce the budget deficit through tax reforms, a higher retirement age, and cuts to the defense budget. Key measures include eliminating VAT exemptions and restructuring pension contributions.
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Israel's Finance Ministry is drafting a comprehensive economic reform plan targeting a reduction of the state budget deficit. Proposed changes include raising the retirement age to 70, canceling VAT exemptions on certain goods, and cutting tax benefits for new immigrants.
The defense budget is set to decrease to 85 billion shekels (~$29 billion). The proposal also encompasses reducing pension contributions from employers and employees, and introducing a mileage tax to alleviate traffic congestion.
With upcoming elections, the plan does not include a budget for 2027, reflecting potential shifts in governmental priorities. These reforms may impact disposable income for citizens while aiming for a more equitable tax distribution.
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