Two things will happen tonight: Israel will greet the new year 2013, and a series of tax and price increases will come into force. The reason is that there is no state budget for 2013, and so the 2012 budget will stretch into 2013, on a monthly basis, that is, the budget for each month will be one-twelfth of the budget for 2012.
In August this year, the government passed a NIS 14.15 billion fiscal package, the effects of which will be felt in 2013. The 2012 budget is 10% smaller than the planned budget for 2013, which will effectively force spending cuts on the government. The Ministry of Finance is presumably pleased with that situation, seeing that the fiscal deficit for 2012 amounts to NIS 22 billion, or 4% of GDP.
So what lies in store tonight? Income tax for those earning between NIS 14,000 and NIS 41,800 monthly will rise by 1%, and a 2% surtax will be imposed on those earning more than this. Water prices will rise by 3.5%, and municipal taxes (arnona) by 2%.
Not everyone though will suffer as 2013 comes in. Public sector employees will enjoy salary rises, especially the more senior ones. Members of Knesset will receive an extra NIS 1,119 monthly, the prime minister will receive NIS 640 more, President Shimon Peres and Supreme Court President Asher Grunis will each receive NIS 1,500 more, and Governor of the Bank of Israel Stanley Fischer will see an extra NIS 579 on his monthly pay slip.
Published by Globes [online], Israel business news - www.globes-online.com - on December 31, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012