The state will not set aside sums of money this year for the reparations fund (the body through which Israel pays victims of hostilities), despite the regulations stating that it must set aside about NIS 2.25 billion.
The Treasury explained that the provision would prevent financing of various tax reductions.
As a result of the non-distribution, it will be possible to finance part of the reduction in the increase in electricity prices, the increase in the reduction of the excise duty on gasoline which will lower the price for the consumer by an additional 10 helots, as well as the cancellation of the taxation on soft drinks and soft drinks.
In the request of Finance Minister Bezalel Smotrich, it was stated that the amount accumulated in the fund currently stands at approximately NIS 18 billion.
The property tax regulations state that each year 25% of the purchase tax collected by the tax authority will be set aside for the fund, while the Minister of Finance, with the approval of the Finance Committee, may change the rate. Thus, the total amount that was supposed to be set aside for the benefit of the fund before the approved amendment, is estimated at a total amount of approx. 2.25 billion shekels.
At the request of the Minister of Finance, no funds will be set aside this year for the foundation, Smotrich, photo: Oren Ben Hakon
According to Yoav Hecht from the budget division of the Ministry of Finance: "The change is intended to finance various tax reductions, including the reduction of the excise tax on coal, amounting to NIS 400 million, which is intended to reduce electricity prices. This component is responsible for about a quarter of the increase, so we estimate that about a quarter of the increase will be canceled due to this measure In my opinion, this may reduce the increase by about 2 to 2 and a half percent, this is the portion of the property tax fund in this reduction. Alongside this, there are other measures related to the electricity sector, which are not related to the property tax fund, in the totality of the measures, I think it is about a 70% reduction in the rate The increase in the price of electricity, within this framework there are additional measures related to the Electricity Authority, which the Ministry of Finance will not bring to the committee."
Hecht further explained that an additional 450 million shekels of the funds that you allocated to the canceled fund are intended for the reduction of the excise tax on gasoline which will lower the price for the consumer by about 10 shekels. pennies, and extend the discount until the end of the year."
"Intends to follow the prices of HDP and sweet drinks", Gafni, photo: Oren Ben Hakon
The finance representative added that an additional NIS 300 million is intended to finance the cancellation of the tax on disposable utensils for 2023 and that the last step that should finance the cancellation of the allocation to the fund, and has not yet been published as an order, is approximately NIS 800 million to finance the cancellation of the tax on sugary drinks for 2023.
The chairman of the committee, MK Moshe Gafni, referred to the reductions on disposable and sweet drinks and said: "I do not mean that the sellers of disposable utensils or those who produce them or make a profit from them, will continue to charge the same price to consumers.
I here in the committee intend to follow it as soon as it is approved.
I would like to establish a team that will examine how much it will cost now and how much it will cost in a week and two more, so that we can make sure that the reduction reaches the consumer.
I think these orders only did damage, but that's my position.
It is something that the state will also invest money, we also want to lower the cost of living through this, so we will follow this in the committee."
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