'Netanyahu opposes Lapid's 0% VAT plan'

Kahlon blasts finance minister for "increasing demand without expanding supply;" Haredi MKs say PM opposed to housing plan.

By
September 9, 2014 19:21
2 minute read.
Yair Lapid.

Finance Minister Yair Lapid.. (photo credit: REUTERS)

Prime Minister Binyamin Netanyahu opposes Finance Minister Yair Lapid’s 0% VAT housing plan, United Torah Judaism MKs said in the Knesset Finance Committee Tuesday.

MK Moshe Gafni (UTJ) said he and MK Ya’acov Litzman (UTJ) met with Netanyahu on Monday night and “he made it clear that he opposes the bill.”

Litzman said he and Gafni asked the prime minister why he is pushing Lapid’s signature housing policy, which would cancel VAT for the purchase of a first home under certain circumstances.

“[Netanyahu] said he never pushed the bill and he never spoke to [Finance] Committee chairman [Nissan] Slomiansky about it,” Litzman told Army Radio.

Litzman’s comments contradicted an interview Slomiansky gave the Knesset Channel last week, in which he said the prime minister asked him to push the bill in order to keep the coalition together. Lapid has reportedly said he will leave the coalition if his policy does not pass.

The Prime Minister’s Office did not confirm or deny the UTJ MKs’ remarks.

The Finance Committee meeting on Tuesday morning descended into political posturing, as almost all discussions over 0% VAT have in recent weeks, with the opposition submitting more than 2,000 objections to the plan.

MK Esawi Frej (Meretz) insisted on presenting his arguments against the bill in Arabic, and the Finance Committee’s legal advisers said that, according to the Knesset’s regulations, he may do so and the legislature must provide translation.

Soon after, MK Yisrael Eichler (UTJ) gave a speech in Yiddish.

Earlier Tuesday, former minister Moshe Kahlon, who plans to return to politics, panned Lapid’s plan at a speech to the Center for Citizens’ Empowerment in Israel’s conference at Tel Aviv University.

“A plan like 0% VAT needs to stand on two legs. You cannot take care of demand without supply,” Kahlon said. “Apartments aren’t like Coca-Cola, where you combine syrup and water and mix it together and have an apartment. It takes time to build them.”

The former Likud minister said he could support 0% VAT on a first apartment as part of a larger plan, but not as a full plan on its own.

“If you have the supply, then have 0% VAT. You can have negative VAT,” he quipped.

The problem, Kahlon said, is that the Israel Lands Authority has a monopoly on selling land, and as long as that situation continues, housing prices will not go down.

Netanyahu publicly promised Kahlon the job of ILA chairman before the last election in 2013, but Construction and Housing Minister Uri Ariel appointed his own candidate, as is dictated by the law that the prime minister did not have changed before making his announcement.

“The State of Israel raised the price of land by 50 percent in half a year, and then no one understands why prices rose and the economic newspapers write the Finance Ministry is surprised,” he added incredulously.


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