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The increase in state tax revenues is pushing down the deficit

In light of the small number of business days during the holidays, tax payments estimated at NIS 2.8 billion were diverted from September to October.

The monthly deficit amounted to NIS 0.6 billion, but excluding tax evasion, a monthly surplus of NIS 2.2 billion is estimated and the cumulative deficit as a percentage of GDP is only about 6.8%.

Tags

• Deficit

• Bank of Israel

• State revenue

• Taxes

Sonia Gorodisky

Monday, 11 October 2021, 15:06 Updated: 15:20

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The trend of reducing the deficit continues: The cumulative deficit in the last 12 months amounted to NIS 51.5 billion in September, which is 7.4% of GDP.

This is a decrease of 0.6% compared to August data.

This was announced today by the Ministry of Finance.

The Ministry of Finance also stated that the cumulative percentage of the implementation of the economic assistance program for the years 2020-2021 is 87.7%, which is NIS 164.8 billion.

In light of the small number of business days during the holidays, tax payments estimated at NIS 2.8 billion were diverted from September to October.

The monthly deficit amounted to about 0.6 billion, but after neutralizing the diversion of taxes estimated monthly surplus of $ 2.2 billion and a cumulative deficit as a percentage of GDP of 6.8% only.

This is optimistic data as data sources at the peak of the crisis deficit reached 12.4% In light of the data, the deficit target set at the budget discussions at 6.8% at the end of the year seems reasonable and some would even say conservative.

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State revenues from taxes (illustration) are 19% higher than in the corresponding period in 2019, pre-Corona (Photo: ShutterStock)

The cause of the decline in the deficit, an increase in state tax revenues

The downward trend in the deficit is mainly explained by the increase in state tax revenues.

In September 2021, state tax revenues totaled NIS 25.4 billion.

An estimated collection of an additional NIS 8.2 billion was postponed to October due to the holidays.

In January-September 2021, revenues totaled NIS 275.8 billion, compared with NIS 230.4 billion in the corresponding period last year.

At uniform tax rates, this is an increase of about 23%.

Direct tax revenues increased by 26%, indirect tax revenues increased by 19% and fee income increased by 5%.

Compared to January-September 2019, tax revenues increased by 19% - direct tax revenues increased by 25% and indirect tax revenues increased by 12%.

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