Israel’s Cabinet, at its first post-holiday meeting today, discussed next year’s budget, and it was reported that the Government’s fiscal situation will still call for a total sum, unchanged from the last budget, of about $2 billion. It was believed that the plans are to reduce direct taxes somewhat next year, but to impose a special levy on income taxes to provide funds needed for defense. There will also be special incentives to investors and to new immigrants. The new immigrants may have their income taxes reduced by being exempted from any tax payments for the first $500 earned each month. Financial circles here today forecast pick-up in economic activity, as compared with the last year’s economic slowdown.
The Cabinet also discussed the security situation, noting the increasing incursions by saboteurs who cross into Israel from Jordan, using commando tactics then escaping back to Jordan across the Jordan River. Such tactics, it was noted, are employed by the saboteurs especially in the Israeli regions near northern Jordan, where Iraqi military contingents are still stationed.
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