Key Israel business group seeks steep cut in food tax

JERUSALEM (Reuters) – The Israeli Manufacturers Association on Monday proposed tax cuts on food, along with a host of other measures aimed at boosting Israel’s economic competitiveness and addressing the country’s high cost of living. .

The association’s economic plan, which was submitted to the Israeli Prime Minister and Finance and Economy Minister, proposed lowering the value-added tax (VAT) on food from 17%, the average across OECD countries, to 9%.

The group, which represents about 1,500 companies and 400,000 workers, will increase state funding for research and development to 0.5% of company output, cut overregulation by 25%, and reduce labor output. He also suggested vocational training to improve his sexuality.

The association said the measures, once implemented, would allow the manufacturing industry to invest in innovation and workforce development, promote sustainable growth and maintain Israel’s international competitiveness.

Association president Ron Tomer said the economy had started to slow down while employment levels fell and production costs rose. But he noted that inflation and economic activity are better in Israel than in the countries with which it competes in foreign trade.

“We must take advantage of these relative advantages to lead the Israeli economy to growth already this year,” he said. “Governments must develop orderly economic and social plans to support this.”

Israel’s economy is projected to grow by 2.8% in 2023 after growing around 6% in 2022. Inflation is projected to moderate from over 5% to 3%.

Israel’s new government is preparing its 2023 budget, which should be fully approved by lawmakers by May.

Incoming Economy Minister Nil Barkat said he intended to ease the “unbearable burden” on Israeli businesses, declaring a “war on regulation” and calling it “economic cancer”.

Last week, Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich said Israel would halt or cut recent increases in property taxes, water and energy costs, unveiling precautionary measures to ease inflation.

Reported by Stephen Scheer.Editing by Jane Merriman

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