Higher tax revenues reduce deficit.

The budget deficit fell to NIS 100 million in January-May from NIS 5.4 billion in the corresponding months of 2010, mainly thanks to higher revenues from real estate taxes and fuel excise, the Ministry of Finance reported today. The government posted a NIS 700 million budget deficit in May 2011, and a deficit of NIS 300 million including net credit.

The budget deficit for 2011 is set at NIS 25.2 billion.

Government expenditures totaled NIS 21.5 billion in January-May, 6.4% more than in the corresponding months of last year, less than the planned 7.4% increase compared with the original 2010 budget. Interest payments totaled NIS 4.3 billion.

Tax revenues rose to NIS 91.4 billion in January-May from NIS 81.5 billion in the corresponding months.

Tax revenues totaled 18.7 billion in May, up from NIS 17.7 billion in the corresponding month. Direct tax revenue rose to NIS 9.3 billion from NIS 8.6 billion and indirect tax revenue rose to NIS 9 billion from NIS 8.7 billion.

Capital market taxes totaled NIS 182 million in May, 31.8% less than in May 2010, reflecting the drop in the capital market and the diversion of investments to shekel instruments. Taxes on interest rose 39%, but taxes on securities fell 58%.

Real estate taxes totaled NIS 758 million May, 33.7% more than in May last year. Betterment taxes rose by 51% and purchase taxes rose 19%.

Fuel excise totaled NIS 6.33 billion in January-May, 4.6% more than in the corresponding months. Real estate taxes and fuel excise rose 16% to NIS 9.6 billion in January-May from NIS 8.2 billion in the corresponding months.

Published by Globes [online], Israel business news - www.globes-online.com - on June 12, 2011