JERUSALEM Oct 30 Israel's cabinet approved a
series of tax changes on Sunday aimed at putting more money in
consumers' pockets following protests against the high cost of
Ministers voted unanimously to lower taxes on petrol and add
5,000 shekels ($1,400) a year to the salaries of fathers of
children under three years of age beginning in 2012.
They will be funded in part by an increase in the corporate
tax rate to 25 percent from 23 percent and a hike in taxes on
capital gains to 25 percent from 20 percent.
A "rich tax" will also be imposed on those earning more than
1 million shekels a year. The tax components of the plan still
require parliamentary approval.
"The consumer will feel in his pocket the cabinet's decision
today. We will continue to act with fiscal responsibility in
order to avoid global economic turmoil," the office of Prime
Minister Benjamin Netanyahu quoted him as saying after the
Netanyahu said that more steps to reduce the cost of living
for Israelis would be approved later.
Earlier this month, the cabinet passed an economic reform
plan drawn up by a government-appointed panel led by economist
Manuel Trajtenberg to boost welfare spending and lower defence
The Trajtenberg committee was formed after weeks of
demonstrations over the summer calling for lower living costs --
particularly for fuel, food, housing and child care -- rocked
Netanyahu's right-wing coalition government.
Protesters camped out in major cities throughout the summer
and their activism culminated last month in one of the
largest-ever demonstrations in Israel's history.
The protests along with threats of consumer boycotts, led
some food makers to drop prices on cheese, baby formula and
About 25,000 protesters took to the streets on Saturday
night to keep pressure on the government.
A Channel 2 poll on Saturday showed that 60 percent of
Israelis rate Netanyahu's performance as good or very good,
although 71 percent believe more social protests are warranted.
Despite the new measures, protesters have not been satisfied
with the government's response and protest leaders have demanded
that the state budget be discarded in a favour of a
"Whoever thinks the government can spend an unlimited amount
of money, thereby increasing the national overdraft, I say: 'We
will not embark on a budgetary adventure that would jeopardise
the stability of the Israeli economy and bring about mass
layoffs,'" Netanyahu said.