Left the corona behind? Record State Tax Revenue - Walla! Of money

2022-01-10T13:03:16.561Z

In December 2021, state revenues from taxes amounted to NIS 34.6 billion, and in 2021 revenues amounted to NIS 383.9 billion, NIS 8 billion above the forecast

Left the corona behind?
Record state tax revenues

In December 2021, the state's tax revenues amounted to NIS 34.6 billion, and in 2021 revenues amounted to NIS 383.9 billion, NIS 8 billion above the forecast and 21% more than the year before Corona.

The deficit is also declining: 4.5% of GDP, although it has not yet shrunk to pre-epidemic proportions

Walla!

Of money

10/01/2022

Monday, 10 January 2022, 14:37 Updated: 14:57

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The deficit for 2021 was 4.5% of GDP.

This is a decrease of 6.9 percentage points compared to 2020. This decrease is considered sharp compared to the developed countries (the decrease is ahead of Finland, Norway, the Netherlands, Germany, Canada, Spain, France, Japan, the UK and other developed countries), but compared to pre-Corona years. The deficit is still high.

One of the main reasons for the sharp decline in the deficit is the state's tax revenues that broke every record this year:

• At uniform tax rates, tax revenues in 2021 increased in real terms by about 22%.

Direct tax revenues increased by 28% compared to 2020 and indirect tax revenues increased by 15%.

Compared to 2019, tax revenues increased by 21%.

Direct tax revenues increased by 29% and indirect tax revenues increased by 13%.

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Israel Tax Authority, the best year - not only a surplus compared to forecasts but also far above the state's tax revenues in the pre-Corona period (Photo: Official website, Eyal Yitzhar, Globes)

Surplus collection compared to the forecast: NIS 8 billion

These figures come against the background of many moves taken by the Tax Authority in order to make it easier for businesses to deal with the crisis. On the one hand, grant payments in the first half of the year, payment schedule and cancellation of fines. On the other hand, activities to optimize collection and soft enforcement given the situation.

• At uniform tax rates, state tax revenues in December 2021 increased by 15% compared to December 2020. Direct tax collection increased by 29% while indirect tax collection decreased by 3%. The decrease is mainly explained by a sharp increase in VAT refunds.

• The collection forecast for 2021 made in October amounted to NIS 375.9 billion. In practice, the collection amounted to NIS 383.9 billion, NIS 8.0 billion above the forecast, with the majority of the surplus (approximately NIS 6.9 billion) recorded in direct tax revenues.

The surplus was mainly due to positive developments in the capital markets, which led, among other things, to particularly high income from capital gains, income from the high-tech industries and increased activity in the real estate market.

• The trend data indicated an increase in tax collection by 5% from the beginning of 2019 until January 2020. The upward trend was interrupted in March 2020 by