Israelis Will Pay More Taxes

The Israeli government is set to pass a bill raising taxes across the board. The Value Added Tax (VAT), which is charged on almost all goods and services, will go up 1 percent to a total of 17 percent. There will also be higher taxes on cigarettes and alcohol. Income tax on higher incomes will also rise. The total fiscal package aims to raise $3.2 billion dollars as Israel’s economy suffers from the economic slowdown in Europe. Exports to Europe have shrunk, and Israel’s budget deficit is growing. Israel’s currency, the shekel, has also weakened against the dollar to a rate of over 4 shekels per dollar. Gas prices are also slated to rise 7 percent on August 1, and will cost almost $4 per gallon. The moves occur as social protests against the rising cost of living continue. Middle-class Israelis say they can no longer make ends meet and lower-income Israelis are growing increasingly desperate. Earlier this month, a protestor set himself on fire and died at a demonstration calling for social justice.