Israel Tax on Foreigners May Not Be Enough to Halt Shekel Surge
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Israeli tax measures to curb the 14 percent gain in the shekel in the past year may fail if similar moves by Brazil to stem advances in its currency are a guide.
Israel will start taxing foreigners as much as 24 percent today on interest income from Makams, short-term bills issued by the Bank of Israel. The shekel has advanced 7 percent against the dollar since the plans were announced Jan. 27, as the central bank raised interest rates to stem inflation. Brazil’s real has gained 47 percent since the end of 2008 even as policy makers raised taxes on local debt purchases to stem the advance.