JERUSALEM (Feb. 24)
Sharp increases in the prices of both consumer goods and raw materials were in prospect in Israel today as a result of major increases in customs and purchase taxes on a long list of commodities.
The tax hikes were announced by the Israel Finance Ministry this morning. They will boost prices for housing, electric appliances and other consumer goods. Also affected were raw material prices for the plastics, paper and glass industries.
Under the new rates, the Israel consumer will pay a 100 percent duty on all rubber products and most electric appliances, including kitchen appliances and light bulbs. Other commodity duties have been doubled. A new travel tax of 55 percent of the price of a ticket purchased in local currency was in effect as of today. It had been 40 percent. All of the new taxes are expected to yield 20, 000, 000 pounds.
Business spokesmen reacted sharply with warnings that the new rates may cause a spiral of price boosts throughout Israel’s economy. Finance Ministry sources, however, expressed confidence that low prices in world markets for various raw materials would help to keep prices in Israel down.