Finally, Some Zip In Israel's Economy
After three years of recession, the Israeli economy is finally picking up. Fueled by rising tech and defense exports and a sharp increase in domestic consumption, the economy is expected to grow at least 3% this year. Some economists say the rate could even top 4%.
The rebound can be credited partly to tax cuts introduced by Finance Minister Benjamin Netanyahu. In February, he lowered the value-added tax by one percentage point, to 17%, and cut special purchase taxes on refrigerators, DVDs, and TVs, spurring a sharp jump in sales of these goods. Car sales also shot up 33% in the first quarter of this year.
More tax cuts are on the way. On Apr. 4, Netanyahu proposed reductions for low- and middle-income wage earners. He also wants to slash corporate profit levies from 36% to 30% over the next four years. If approved by the Knesset, the proposals would take effect July 1.
Edited by Rose Brady