Israel Should Raise VAT Rate, Not Income Tax, OECD Says

Law360, New York (December 9, 2013, 1:52 PM EST) -- Israel should tackle its budget deficit by increasing value added tax rates but should leave its income-tax rates alone because 20 percent of the nation's households fall below the relative poverty line, according to an Organization for Economic Cooperation and Development report released Friday.

The OECD said Israel's “sizeable” debt-servicing costs have to be accommodated through greater taxation, but advised that the tax hikes occur in Israel's VAT system and within immobile tax bases like real estate because income tax hikes will aggravate the country's poverty...
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