Israeli Cabinet Committee to Discuss Bill Lowering VAT from 18% to 17% to Ease Cost of Living

The Israeli Ministerial Committee on Legislation is set to discuss a bill proposing a reduction of the value-added tax (VAT) rate from 18% to 17%. The initiative is led by Yitzhak Goldknopf, chairman of the United Torah Judaism party, in collaboration with members of both the coalition and opposition. This social-economic measure aims to directly counteract the rising cost of living that has heavily burdened Israeli households, especially since the outbreak of the war.

Unlike targeted grants, the bill seeks a broad reduction in indirect taxes applied to nearly all goods and services, providing immediate and tangible financial relief to all citizens. The legislation particularly emphasizes support for large families who face consistently high living expenses. The explanatory notes highlight that the current uniform VAT rate disproportionately affects lower-income families who consume more essential goods such as food, clothing, transportation, and basic services.

Goldknopf stated ahead of the committee discussion, "As many families struggle with heavy living costs and continuous price hikes, it is the government's duty to do everything possible to ease the public's burden." He added that reducing VAT is a necessary step to provide immediate relief, especially for large families, and pledged continued efforts to improve family welfare and reduce living expenses in Israel.