Growth in 2016 contributed NIS 4.5 billion in surplus tax revenues, the Bank of Israel estimated in a fiscal review published today. The 2016 tax revenue surplus totaled NIS 7.5 billion. According to the Bank of Israel Research Department, the unexpected growth in tax revenues is attributable mostly to imports of consumer goods, mainly cars, which contributed NIS 5 billion to the gap between the original revenue forecast and actual tax revenues. NIS 4.5 billion is attributable to faster than expected growth in nominal GDP.
The Bank of Israel believes that revenues from taxes on imported cars and real estate together amounted to 0.5-0.7% of GDP in recent years.
In its report, the Bank of Israel predicts that the 2017 budget deficit will be, lower than the 2.9% of GDP target set in the budget, and will be 2.5% of GDP in 2018, also slightly less than the 2.9% of GDP target for that year.
In its survey, the Bank of Israel warns that the transfer of IDF bases to the Negev is liable to be delayed if no revenue is found to pay for the cost, which will amount to NIS 2.8 billion in 2017 and NIS 2.1 billion in 2018. This project is contingent on revenues from the sale of land by the Israel Land Authority (ILA). "The more difficult it is to collect these designated revenues - some of which were already included in the 2015-2016 budget and not realized - the expenditures dependent on them, mainly in the budgets for housing, education buildings, investing in transportation infrastructure, and building IDF bases in the Negev - may be delayed, which may have a negative impact on achieving important government objectives in these areas," the review stated.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 23, 2017
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