The hidden taxes that put a strain on Israeli budgets

taxes in israel Cabinet Expert Comptable Dray & Dray

Israel's income tax is one of the lowest in the developed OECD countries, while indirect taxes on consumption are painless, since consumers are not always aware of them.

For example, VAT in Israel will add 17% to each expense, regardless of the individual's personal income.

But that's not all: there are also invisible or hidden taxes that Israelis pay without realizing it.

This week, opposition Knesset deputies launched a media campaign against the 2017 budget under discussion in Jerusalem.

According to calculations by Professor Manuel Trajtenberg, who is a member of parliament for the "Zionist Camp", an average Israeli family (a couple with two children) would spend 4,600 shekels a month on "hidden taxes" (around 1,100 euros).


Education is not really free in Israel. The myth of free education is perpetuated by the invisible taxes paid by parents for their children's education: financial participation in compulsory extracurricular activities, private lessons, day-care centers, afternoon clubs, and so on. In total, a family would spend 1,240 shekels a month (300 euros) to guarantee their children a decent education.


When it comes to their health, Israeli families don't just pay the compulsory health insurance contribution. They also pay for supplementary insurance, to shorten the queues required for certain medical procedures, to buy medicine not covered by the Social Security system, for assistance for an elderly relative, etc. A total of 400 shekels (100 euros) per month on average.


Housing in Israel remains expensive, and is one of the main items of expenditure for the average family. The high cost of housing is fuelled by speculation in real estate and land, which drives up prices. According to the Zionist Camp, every month an Israeli family spends 2,000 shekels (490 euros) to finance the extra cost of a mortgage or rent.



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