The increase will cause problems throughout all of the economy and will ultimately lead to inflation, Likud MK says.
By REBECCA ANNA STOIL
Likud politicians are famous for their strolls through open-air markets to drum up support in advance of elections, but on Monday Likud MK Miri Regev will walk through the market in her native Kiryat Gat to protest the proposal to charge VAT on produce.
Regev is enlisting the street - or more correctly the shuk - to assist her in her struggle against the tax, which is part of the draft budget for 2009, and promises that Tuesday's Knesset Finance Committee meeting to discuss the tax will include shop owners and other representatives of working-class interests.
Regev initiated the meeting with market stand owners to stress that the proposal will impact all sectors of the economy. Fruits and vegetables are currently exempt from VAT.
"The increase will cause problems throughout all of the economy, from restaurants to falafel stands to canned goods, and will ultimately lead to inflation," warned Regev. "In a period of recession, we expect that people should have more money to invest into the economy, and this proposition would do exactly the opposite. The increased VAT will become an engine that will stop the economy."
The tax, say Regev and other detractors, would directly harm the middle and lower classes, and will give a leg up to "black" and "grey" markets, where the produce will be sold without VAT.
Regev met with Finance Committee Chairman MK Moshe Gafni (UTJ) and secured invitations for produce-sellers, including supermarket owner Rami Levi and owners of market stalls, to come and testify before the powerful committee on the impact of the proposed tax.
Regev said that she is working to create a social caucus within the Likud to help defeat the tax by withholding coalition votes on the budget. Regev also plans on meeting with Prime Minister Binyamin Netanyahu to try to convince him to remove the clause from the budget before it is voted on by the Knesset in the coming weeks.
"I am sure that the prime minister, who showed responsibility by canceling the social-welfare cuts that the Finance Ministry's accountants had included in the budget, will do the same for this," said Regev.
"I hear the pain and disappointment of market stall owners on this issue and to help them, I plan on making my voice heard, too."
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