Outrage grows as Israel’s living costs soar 38% above developed nations

Electricity costs are also surging 3.5%, while water rates rise 2%, and property taxes ostensibly charged to the renter are climbing too.

By Jewish Breaking News

Israeli bureaucrats faced harsh criticism Monday during a contentious State Control Committee hearing that exposed the government’s struggle to address skyrocketing living costs.

The National Economic Council presented a sobering assessment revealing that prices in Israel are a whopping 38% higher than in other developed nations, with some sectors reaching an eye-watering 52% premium.

While Council Chair Prof. Avi Simhon acknowledged the “reality is not good,” his defense leaned heavily on excuses such as “government policy” and “very high taxation.”

Bank of Israel representative Dr. Sigal Ribon argued inflation would have normalized if not for the war.

Although Israel’s inflation has dropped from its 5.4% peak to 3.4% in recent months, the government’s new tax measures for 2025 could reverse this progress and keep interest rates high.

Value-added tax (VAT) has been increased from 17% to 18%, which even Ministry of Finance official Uriel Shem Tov admitted nobody wanted but claimed was necessary due to war costs.

“Professionally speaking, the Ministry of Finance does not support raising income tax. I can’t say that raising VAT is a good measure, but that was the alternative that was chosen,” he said.

“We raised the tax on one-person companies and holding companies in such a way that the company owners will feel it. This represents revenue of about NIS 10 million for the state treasury in 2025.”

Electricity costs are also surging 3.5%, while water rates rise 2%, and property taxes ostensibly charged to the renter are climbing too.

Most cities are hiking rates by 5.2%, with Jerusalem going even further by targeting newer buildings constructed since 2020 with additional increases.

“The tax hikes will create a social wall that will prevent all disadvantaged populations from overcoming the crisis. The entire economic approach needs to be changed,” Latet Director Gilles Darmon said.

After hours of bureaucratic back-and-forth, the committee’s solution followed a familiar pattern Israelis are too used to seeing: form another task force, commission more studies, and reconvene in six months.

With over 1 million children living in poverty, that timeline offers little hope as they go to bed hungry tonight.