MKs: VAT on fruits, vegetables is rotten

Finance Committee members are unanimous in their opposition to the proposal to tax fruits and vegetables.

By SHARON WROBEL
May 27, 2009 09:35
2 minute read.
organic vegetables 88

organic vegetables 88. (photo credit: )

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

The government's proposal to levy a value added tax on fruits and vegetables will not receive Knesset approval, Knesset Finance Committee chairman Moshe Gafni (United Torah Judaism) said Tuesday. The Finance Ministry should find alternative budget solutions, he said. "The VAT levy on fruits and vegetables will not be passed by the committee," Gafni said during a committee session. "The Knesset Finance Committee will take an active role in seeking budgetary alternatives for the Finance Ministry." Finance Committee members were unanimous in their opposition to the proposal to tax fruits and vegetables, which was passed by the cabinet earlier this month as part of the 2009-2010 budget plan. Finance Ministry Deputy Budget Director Raviv Sovel told the committee there was no reason to exempt fruits and vegetables from VAT. Other basic consumer items that the poorer segments of the population depend on, such as bread, are not exempted, he said. The VAT levy on fruits and vegetables is expected to generate NIS 1.8 billion a year for the government's coffers, according to the Finance Ministry. "The budget-package deal includes measures to increase taxes [VAT levy on fruits and vegetables, 1 percent increase in the VAT rate, raising VAT on cigarettes and alcohol], which are juxtaposed with measures to raise [National Insurance Institute] child allotments that will increase the monthly income of low-income families by an average of NIS 120, while the VAT levied on fruits and vegetables would add NIS 24 to the monthly expenses of low-income groups," Sovel said. MK Haim Oron (Meretz) said linking child allotments to VAT on fruits and vegetables was not relevant since the increase in child allotments was to compensate for their being cut over recent years. "There is no chance that the VAT levy on fruits and vegetables will pass," he said. Owners and vendors from open-air markets around the country demonstrated in front of the Knesset Tuesday morning to protest the government's intention to levy VAT on fruits and vegetables. The planned tax on fruits and vegetables would pass in the Knesset, Finance Minister Yuval Steinitz (Likud) said Tuesday, adding that the ministry did not have any alternatives. Agriculture Minister Shalom Simhon (Labor) on Tuesday called upon Labor Party chairman Ehud Barak to declare that Labor will oppose the VAT levy on fruits and vegetables. "The VAT imposition on fruits and vegetables is a disaster for the weaker segments of the population and farmers," he said. "It is unfortunate that the finance minister has chosen to hurt the less well-off and farmers, who are struggling to survive especially in the Negev and the Galilee, instead of postponing the tax-cutting plan by two years." Businesses and farmers warned last week that the proposed tax on fruits and vegetables would encourage more activity in the black market, lower demand, make the produce more expensive and hurt the poor.

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS