Finance Ministry refuses to cut VAT on food

The committee will try to formulate a short-term solution for the dairy sector only by the end of the week.

July 5, 2011 22:18
1 minute read.
cottage cheese

cottage cheese 311 R. (photo credit: Marc Israel Sellem)

The campaign against food prices reached the Knesset Economic Affairs Committee on Tuesday. Following a Globes investigative report about the high cost of food in Israel compared with western countries, committee Chairman Carmel Shama (Likud) called an urgent session on the subject .

“There is almost no product in the grocery store that the consumer doesn’t pay inflated prices for. And when he goes home – he needs to pay more for gasoline and other expenses,” said Shama at the opening of the session. “Granted, the government is not responsible for the price problem, but from the moment that it does not deal with the problem, it becomes guilty. This cancer has spread to all branches of the food and consumer industries, and if it is not completely rooted out, the guilt of the greedy companies will turn into the guilt of indifferent publicly elected officials.”

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Deputy Finance Minister Yitzhak Cohen said that the special inter-ministerial committee charged with the task of examining food prices in Israel will meet for the first time only this upcoming Sunday. The committee will also examine the use of differential VAT rates, but made it clear that the Finance Ministry does not intend to change VAT policy in 2011 or 2012.

Industry, Trade and Labor Ministry Director-General Sharon Kedmi promised: “The committee will try to formulate a short-term solution for the dairy sector only by the end of the week.” At the end of the session, Shama explicitly threatened the Finance and Industry ministries: “If time is wasted in drawing conclusions about the issues discussed here, I will put this mildly – our work relations with the ministries will be hurt. The people of Israel are waiting for an answer from the Industry, Trade and Labor Ministry.”

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