Netanyahu agrees to 0% VAT on basic products

The agreement with Aryeh Deri paves the way for Shas to enter the new Israeli government coalition.

By Lilach Weissman, GLOBES

Prime Minister Benjamin Netanyahu has surrendered to demands by Shas for exempting basic products from VAT, thereby paving the way for Shas’s entry into the government.

Netanyahu met today with Shas chairman Aryeh Deri to discuss a possible outline, and to settle the question of which ministries Shas will hold. In addition to the Ministry of the Economy, Deri is demanding either the Ministry of Welfare and Social Services or the Ministry for the Development of the Negev and Galilee.

The first coalition agreements were signed yesterday with Kulanu and United Torah Judaism, six days before the deadline for forming a government. Moshe Kahlon will be Minister of Finance, Yoav Galant will be Minister of Construction and Housing, and Kulanu will also receive the Ministry of Environmental Protection.

Kulanu will also receive the Planning Administration and other planning institutions formerly under the responsibility of the Ministry of the Interior, Israel Land Authority (ILA), and the chairmanship of the Knesset Labor, Welfare, and Health Committee, which will be given to MK Elie Elalouf. The party will also appoint a deputy minister, but it is unclear in which ministry. Kahlon will be chairman of the Housing Cabinet, a member of the Security Cabinet, and vice-chairman of the Economic Social Cabinet, which Netanyahu will chair.

The coalition agreements between Kulanu and Likud also stipulate a series of important reforms Kahlon plans to lead, including measures for lowering housing prices, banking reform, measures for lowering the cost of living, implementation of the recommendations by the Elalouf Committee for combating poverty, and 700,000 more public housing units.

Likud and United Torah Judaism agreed that child allowances would be raised starting in May, and that payment would be made retroactively after the budget is approved, a measure whose cost is estimated at NIS 1.5 billion. It was also agreed that yeshiva budgets would be restored to their level before Yair Lapid became Minister of Finance. The reform introduced by MK Yakov Litzman when he was Deputy Minister of Health granting free dental treatment up until age 18 as part of the health basket will be reinstituted, and a reform in nursing care insurance will be carried out.

Criminal sanctions under the compulsory military service law will be eliminated, and the 2012 level of support for yeshiva students will be restored.

Published by Globes [online], Israel business news – – on April 30, 2015

April 30, 2015 | Comments »

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