Yishai opposes regressive VAT increase

July 25, 2012 18:07

Interior Minister Eli Yishai on Wednesday came out against Prime Minister Binyamin Netanyahu's planned increase to the Value Added Tax, saying the regressive tax hurt weak sectors of society.

"I think we need a progressive tax, so the rich pay more and the poor pay less," Yishai said in an interview with Army Radio. "It can't be that a middle class person pays exactly what a rich person pays."

Items like luxury cars, jewelry, restaurants and hotel rooms, more likely to be purchased by the rich, should be taxed at a higher rate instead, Yishai said.

Proposed budget cuts, the minister continued, have the same problem, hitting the weakest sectors of societies by taking away vital support and services. The funds, he noted, are not coming off ministers' salaries.

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