Cabinet approves sweeping austerity measures

The cabinet approved Monday a series of sweeping austerity measures including tax hikes and spending cuts which it is hoped will raise NIS 14.15 billion next year and reduce the budget deficit by 1.5 percent. The reforms passed with a majority of 20 to nine, with the only ministers voting against hailing from the Independence and Shas parties, as well as Welfare and Social Services Minister Moshe Kahlon (Likud.)
Value Added Tax will rise by one percentage point to 17% Wednesday. All income between NIS 8,881-41,830 per month will be taxed an extra 1%, while all income above NIS 67,000 per month will be charged a 2% surtax, starting January 1.
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