The state is poor: State tax revenues continue to decline (Photo: ShutterStock)
The Ministry of Finance's Chief Economist's Department today publishes data on state tax revenues, which continue to tell a grim story: in April 2023, state tax revenues totaled NIS 35.6 billion. At uniform tax rates, state tax revenues declined in April 2023, in real terms, by 5% compared to April 2022.
Collection from direct taxes declined by 8 percent compared with last year, collection from indirect taxes declined by 2 percent, and collection from fees declined by 2 percent. The decline in direct tax revenues is mainly in real estate tax revenues and income tax.
In January-April 2023, revenues totaled NIS 149.3 billion, compared with NIS 156.0 billion in the corresponding period last year. At uniform tax rates, tax revenues decreased by 7%. Direct tax revenues declined by 10% and indirect tax revenues declined by 3% compared to January-April 2022. Fee revenues remained virtually unchanged.
The decline in January–April 2023 is mainly explained by high revenues in January–April 2022 (real growth of 20% in total revenues and 27% in direct tax revenues, compared to the corresponding period 2021).
Trend data indicated an increase of 5 percent in tax revenues from 2012 to 2019. The upward trend was interrupted in 2020 with the outbreak of the COVID-2020 crisis, but resumed at the end of 2022, and from then until the peak of the first half of 2022, collection increased at a faster pace than usual. Collection data from mid-6 indicate a downward trend at an annual rate of 2022 percent compared with the peak of the first half of 1 (see Figure <>). At the same time, today's collection is above the pre-COVID-<> trend line.
Less revenue and a deepening deficit. Where will the state balance it from? (Photo: official website, Eyal Yitzhar, Globes)
Israel Tax Authority revenues:
Tax Authority revenues in April 2023 totaled NIS 35.0 billion, compared with NIS 35.9 billion in the same period last year. At uniform tax rates, the Tax Authority's revenues declined by 5%. Direct taxes declined by 8.1% and indirect taxes decreased by 2% compared to April 2022.
Direct tax revenues:
Direct tax revenues totaled NIS 20.7 billion in April 2023, compared with NIS 21.7 billion in April 2022. At uniform rates, direct tax revenues declined by 8.1 percent in April 2023. The most significant decline was in real estate tax revenues.
Income tax from the self-employed and companies (gross) – In April 2023, the collection in this section amounted to NIS 7.8 billion, compared with NIS 8.2 billion in April 2022. At uniform rates, collection from self-employed individuals (including shareholders in companies) declined by 14 percent, and collection from companies declined by about 8 percent. The reduction in corporate tax in April 2023 follows a high increase in collections in April 2022. From January to April 2023, revenue in this section decreased by 10%.
Deductions (income tax deductions from renters and other withholdings, including from the capital market) – Collection from deductions totaled NIS 13.0 billion in April 2023, compared with NIS 11.8 billion in April 2022. In real terms, this is an increase of 5 percent, deriving mainly from an increase in salary deductions as a result of the payment of a one-time grant in the public sector.
• The capital market: Gross collections of about NIS 0.6 billion were recorded in April 2023, similar to April 2022. In real terms, this is a decline of 9%.
• Real estate taxation – Net revenues from real estate taxation amounted to NIS 1.0 billion in April 2023, compared with NIS 1.9 billion in April 2022, a real decline of 49%. Collection from capital gains tax declined by 56% and collection from purchase tax declined by 45%, compared with the same period last year. It should be noted that this is a month with few working days due to the holidays. April 2022 was also Passover, but with more working days. Cumulatively, since the beginning of the year, real estate tax revenues have declined by 35%.
Refunds – In April 2023, refunds from income tax and deductions totaled NIS 1.3 billion, compared with NIS 1.1 billion in April 2022, an increase of 14% in real terms.
Indirect tax revenues: In April 2023, indirect tax revenues totaled NIS 14.3 billion,
similar to the same period last year. At uniform tax rates, revenues fell by 2%. Cumulatively, in January-April 2023, revenue decreased by 3% compared to January-April 2022.
Value added tax – Total net VAT revenues in April 2023 reached NIS 10.7 billion, compared with NIS 10.2 billion in April 2022. At uniform tax rates, this is an increase of about 1% due to a high payment in an unusual amount. Excluding this amount, collection in April was 8 percent lower than in the corresponding figure last year.
Since the beginning of the year, net VAT revenues have declined by 9%. The decline is partly due to an increase in returns in the vehicle trade and construction industry, but also to a slowdown in consumption.
• Import purchase tax – Import purchase tax revenues totaled NIS 1.6 billion in April 2023. Excluding the introduction of vehicle imports, this represents a real decline of 5 percent compared with April 2022. The decline is partly explained by low vehicle imports in April 2023 (even after neutralizing the introduction) compared to high imports in April 2022.
Since the beginning of the year, excluding vehicle advances in December 2022, import purchase tax revenues have increased by 18%.
• Excise fuel – Excise tax revenues, before the refunds for the diesel arrangement, amounted to NIS 1.7 billion in April 2023, compared with NIS 1.8 billion in the same period last year. This is a real decline of 10 percent, deriving mainly from a reduction in excise duty on gasoline and from fewer working days.
- money
- news
Tags
- State revenue
- Tax Authority
- Tax Authority
