Tax hikes reduce deficit

Increased tax revenues have reduced the deficit. The deficit in July 2013 totaled NIS 400 million, and the deficit in January-July was NIS 10.5 billion, the Ministry of Finance reported today.

The deficit for the 12 months through July was NIS 36.4 billion, 3.8% of GDP, down from 4.5% of GDP for the 12 months through April. Through the end of July, the government operated without a budget, but pursuant to the Basic Law: State Economy, it operated on a monthly basis of 1/12 of the 2012 budget.

Government expenditures totaled NIS 25.5 billion in July, including NIS 23.3 billion in spending by ministries, and NIS 2.2 billion in interest payments. "Spending by ministries in July was higher than in June (which was higher than in the preceding months), because of higher transfer payments by social ministries (health payments and indirect salary payments), payment of the clothing allowance to government employees, and higher spending by the Ministry of Defense," said the Ministry of Finance.

Spending by ministries totaled NIS 135.4 billion in January-July, 5.2% more than in the corresponding period of 2012, compared with the planned 8.8% increase in the 2013 budget compared with the budget performance in 2012.

Tax revenue rose to NIS 23.2 billion in July from NIS 20.2 billion in July 2012, and tax revenues rose to NIS 140.1 billion in January-July from NIS 129.6 billion in the corresponding period.

Direct taxes totaled NIS 9 billion in July, up 17.6% over July 2012. Direct taxes totaled NIS 69 billion in January-July, up 5.1% over the corresponding period, and indirect taxes rose 8.3% to NIS 67.7 billion.

Property taxes totaled NIS 4.3 billion in January-July, up 26.9% over the corresponding period; VAT rose 13.5% to NIS 47.4 billion; the cigarettes excise rose 9% to NIS 477 million; but the fuel excise fell 0.2% to NIS 9.2 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on August 7, 2013