Israel’s fiscal deficit doubled to 0.6% of GDP at the end of May 2023, amounting to NIS 10.7 billion over the past 12 months, the Ministry of Finance Accountant General Division reports. In May alone the fiscal deficit amounted to NIS 4.4 billion, compared with a fiscal surplus of NIS 1.3 billion in May 2022. The fiscal surplus since the start of 2023 has withered to just NIS 13 billion.
Israel’s fiscal deficit had widened to 0.3% of GDP, or NIS 4.9 billion, in the 12 months ending April 2023, up from 0.01% in the 12 months ending March 2023.
State revenues in the first five months of 2023 have fallen 4.2% compared with the corresponding period of last year, when revenues were especially high. At the same time, state expenditure has risen 8.7%, so that the deficit has been created by both falling revenues and rising expenditure. The trend worsened in May compared with April when revenues fell 3.2% and expenditure rose 6.9%.
In addition to rising expenditure, the Ministry of Finance explains that approval of the budget last month, “Allows increasing the budget in 2023 compared with the previous budget by over NIS 25 billion, which is already being expressed in a rise in expenditure in May.”
Tax collection in May 2023 amounted to NIS 34.1 billion, compared with NIS 37.3 billion in May 2022. Tax Authority revenue fell by 10%, direct taxes fell by 11% and indirect taxes fell 9%.
State revenues from real estate taxes reflected the problems in the market. Revenue from this sector amounted to NIS 1.3 billion in May 2023, down 52% from May 2022. Betterment tax collection fell 42% and real estate purchase tax fell 57% compared with last May.
Published by Globes, Israel business news – en.globes.co.il – on June 8, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.
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