Jerusalem, 14 October, 2026 (TPS-IL) — Israel Tax Authority Director Shay Aharonovitch opposes raising value-added tax (VAT), arguing that Israel should consider alternative ways to increase state revenues and ease the tax burden on workers.
Speaking at an Investment Houses Association conference, Aharonovitch warned that 2027 and 2028 could pose economic challenges despite strong tax revenues in 2026.
Aharonovitch called another VAT increase a temporary fix and urged structural changes instead. VAT rose from 17% to 18% in January 2025; increasing it to 19% would cost a family spending NIS 10,000 ($2,700) monthly on taxable purchases approximately NIS 85 ($23) more per month.
Aharonovitch also cited a reform taxing undistributed profits in closely held companies, which generates nearly NIS 10 billion ($2.7 billion) annually, as a significant revenue source.
Tax collections reached NIS 443.7 billion ($119 billion) through September, up 11.3% in real terms year over year.
