Israeli Prime Minister Bibi Netanyahu and Finance Minister Moshe Kachlon announced in a joint press conference on Thursday that they plan to cut Israel’s value-added tax (VAT) and corporate tax rates following a recent tax surplus.
“In order to encourage growth, I have decided together with Minister of Finance Moshe Kachlon to reduce taxes, to cut VAT to 17 percent and Companies Tax to 25 percent,” Netanyahu said, adding that he believes the move will help contribute to economic growth.
Kachlon said the decision to cut the taxes stemmed from surplus tax receipts that amounts to billions of shekels, “which we intend to return to Israel’s citizens.”
“If there are further surpluses, we intend to continue the trend of tax reductions,” added Kahlon.
According to Globes, Israel’s state tax revenues were NIS 2.5 billion ($636 million) higher than forecasted in August, with a cumulative surplus of NIS 10 billion ($2.5 billion).