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Cabinet okays 0% VAT on public transport, water, electricity

The cabinet approves removing the value-added tax of 17% on public transportation, water and electricity for Israel’s poor.

The initiative was proposed by Shas chairman Aryeh Deri, a former economy minister who now holds the periphery development portfolio.

The decision charges Deri and Finance Minister Moshe Kahlon with implementing the 0% VAT on public transportation, water and electricity for the poor by January 1, the Globes business journal reports.

“The decision will benefit mainly the economically disadvantaged and those we have to help,” Deri says.

The measure is opposed by the Finance Ministry, where officials have said they prefer tax reforms that more directly benefit the working poor, such as increases to the negative income tax.

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