The Finance Ministry believes the economy is slowing down: Tax collection was lower than predicted in October, as was the case in previous months, too.
Finance officials expect to collect NIS 2 billion to NIS 3 billion less this year than anticipated. The government had expected NIS 213.5 billion in revenues this year.
Collection in 2012 will be NIS 4 billion to NIS 5 billion less than anticipated.
Part of this was due to the global economy, but part was also due to the social protest, said treasury officials: Every NIS 1 price cut translates into 35 agorot in taxes that the government won't be receiving.
Due to the lower collection figures as well as the crisis brewing in Europe, the treasury decided to adopt a more cautious, conservative policy. This included decreasing forecasts for tax collection. These forecasts are the basis for determining the national budget and the deficit.
Because the shortfall for 2011 is not expected to be that large, this year's deficit is expected to amount to only 3.3% of GDP - only slightly higher than the 3% target. In 2012, it is expected to be 2.6%, slightly above the 2% target.
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