The Israeli government's fiscal deficit amounted to NIS 24.5 billion in 2015, 2.15% of GDP. This was thanks to the lack of a budget for most of the year, which forced the government to operate according to the rule that it could spend 1/12 of the previous year's budget each month, in effect forcing fiscal discipline upon it. According to the figure released by the Ministry of Finance today, the deficit in December alone was NIS 16.4 billion.
The original deficit target was NIS 31.4 billion (2.75% of GDP). The Ministry of Finance explains that the combination of high tax revenues (NIS 3.6 billion more than projected) and lower-than-forecast spending (by NIS 3.3 billion), contributed to reducing the annual deficit. Last year's deficit was financed by raising NIS 19.3 billion in bond issues.
The figures show that government expenditure totaled NIS 325.7 billion in 2015, compared with planned expenditure of NIS 329 billion. Of this, spending by government ministries amounted to NIS 276.5 billion, 5% more than in 2014. Interest payments on government debt totaled NIS 30.6 billion, compared with NIS 31 billion in 2014.
State revenues were NIS 268.5 billion last year. Tax revenues rose 7.1% to NIS 261.7 billion. NIS 10 billion in defense aid was received form the US.
A breakdown of tax revenues shows that direct tax revenues rose 10% last year to NIS 135.4 billion, which was 52% of total tax revenues. Revenues from indirect taxation rose 3% to NIS 126.6 billion.
Revenues from real estate taxes jumped 37% last year to NIS 10.6 billion. On this, the Ministry of Finance says, "It should be pointed out that collection in 2014 was affected by a standstill in transactions because of the 0% VAT plan for new homes, a plan that in the end was not implemented. The growth in collection in 2015 also stems from the rise in the purchase tax rate on additional homes in June. The growth in collection in 2015 was mainly in the Tel Aviv area, where a rise of 51% was recorded, and in Netanya, where a rise of 42% was recorded. The rises in these areas account for about half of the rise in collection."
Revenues from fuel taxes rose 5.8% last year to NIS 17.2 billion, an all-time high. Revenues from taxation on cigarettes fell 14% to NIS 634 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 10, 2016
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