5 March 2009 356 views No Comment Email This Post

Cuts in income, corporate tax rates planned despite Finance Ministry’s suggestion to freeze cuts due to deepening recession; prime minister-designates office says he will also work to increase completion in electricity market.

Prime Minister-designate Benjamin Netanyahu announced Thursday morning his plans to cut taxes in 2009, immediately after he establishes Israel’s next government.

The planned tax cut, which will come in addition to the cuts already made by the Finance Ministry in the framework of its multi-year reform plan, was announced in response to recent reports saying Netanyahu was due to delay the reforms to 2010.

The Finance Ministry has suggested that the tax cuts be frozen due to the recession.

Netanyahu plans to initially cut income tax rates for low and medium income earners in an effort to counter the deepening economic downturn, and later reduce the income tax for small and medium-sized businesses.

The Likud chairman also plans to continue the corporate tax reductions in order to assist ailing factories, particularly in the periphery.

Netanyahu’s office further announced that he was seeking an agreement with the Histadrut Labor Federation to prevent additional layoffs, adding that his plan also includes infrastructure development, namely the construction of desalination plants.

The prime minister-designate will also work to increase competition in the local electricity market, his office said.