Slower March revenues could limit Kahlon's cuts

Kahlon, Netanyahu  photo: Flash 90
Kahlon, Netanyahu photo: Flash 90

The Israel Tax Authority believes that revenues will exceed the assumed budget by only NIS 300 million rather than billons.

According to the latest forecast, the surplus of tax revenues over the amount projected by Ministry of Finance chief economist Yoel Naveh for the budget will be less than expected, which will give Minister of Finance Moshe Kahlon less room for making tax cuts. The tax revenue figures for March have not yet been published, but the Israel Tax Authority believes that they will exceed the revenues assumed in the budget by only NIS 300 million.

This will make the total first quarter tax revenue surplus NIS 1.6 billion, while the Ministry of Finance was hoping for a surplus of several billions. Naveh is scheduled to publish a revised revenue forecast in the coming days, based on the actual amount collected in the first quarter.

Kahlon has already undertaken to increase allowances for the disabled by several hundred million shekels, as recommended by a committee he appointed, headed by former Ministry of Finance Accountant General Yaron Zelekha. In recent days, Kahlon has also promised to increase aid and benefits for young working mothers and soldiers.

Some of the benefits mentioned by Kahlon may come in the form of tax cuts, such as increasing tax credit points for mothers, and a negative income tax those earning less than the minimum wage. As reported yesterday by "Globes"," the tax cuts that Kahlon is considering are income tax cuts, but their amount cannot exceed the projected surplus in revenues above the budget projections.

Published by Globes [online], Israel Business News - www.globes-online.com - on April 5, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Kahlon, Netanyahu  photo: Flash 90
Kahlon, Netanyahu photo: Flash 90
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