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New Taxes to Finance Immigrant Settlement Send Israeli Prices Soaring

The man on the street in Israel suddenly felt the financial impact of the Rumanian mass immigration when the prices of some 80 items leaped upward today following imposition of sharp increases in customs and excise taxes on a variety of commodities.

The increases, covering a range from sugar and coffee to paper and building materials, were approved late last night by the Economic Ministers Committee seeking ways to cover the 185,000,000-pound ($102,775,000) increase in the new budget to finance immigrant housing and absorption.

The increases preceded an expected announcement by Finance Minister Levi Eshkol of a 40,000,000-pound ($22,223,000) compulsory immigration loan which will represent a 10 percent hike in everybody’s income tax.

The excise increases also will affect liquor prices. The higher customs rates will raise clothing prices. Abolition of subsidies meanwhile are considered certain to increase prices of several basic foodstuffs.

The Ministerial Committee compromised on several points, including a decision to abandon the idea of raising taxes on cheaper brands of cigarettes which had been opposed by the leftist parties. The compromises made unnecessary a special Cabinet meeting originally scheduled for today.

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