Despite signs of slower economic growth, state tax revenues are still strong. The Ministry of Finance today reported a giant NIS 1.6 billion surplus in tax revenues for May, bringing the cumulative surplus since the beginning of the year to NIS 2.7 billion.
At the same time, the Israel Tax Authority is reporting a spurt in imports of vehicles and consumer products to Israel. Surging private consumption and the relatively strong shekel, which have contributed to the import boom, are responsible for the large surplus in tax revenues, despite sliding exports of goods and services. For example, taxes on imported vehicles alone added NIS 630 million in tax revenues in May alone.
Tax Authority figures show that imports of private vehicles soared 75% in May, compared with May 2015. Imports of commercial vehicles zoomed by no less than 114%. The Tax Authority attributed some of the meteoric rise in vehicle imports to the release of vehicle inventories to auto leasing companies and special bargains offered by the companies. Another cause was the low shekel-dollar exchange rate during most of May.
Cumulative vehicle imports since the beginning of the year totaled no fewer than 132,136, up 65%, compared with the corresponding period last year.
The import trend for electrical and electronics products in May 2016 was mixed. Refrigerator imports jumped 55%, but imports of washing machines were down 17%, Imports of clothes dryers climbed 93%, while imports of dish dryers sank 21%. Imports also rose for entertainment electronics products, television (81%), and videos and DVDs (38%). Since the beginning of the year, imports of washing machines, dish dryers, and other white products and entertainment electronic products have risen.
Published by Globes [online], Israel business news - www.globes-online.com - on June 9, 2016
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