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The Finance Ministry reported a surplus in government activities in July, according to figures released yesterday by the accountant general. Total government income reached NIS 16.314 billion in July (NIS 15.596 billion domestically, the remainder overseas), while state expenditure topped NIS 15.709 billion (of which NIS 14.957 billion was spent in Israel). This left the government with a surplus for the month of NIS 409 million.

In the first seven months of the year, the treasury reported total income of NIS 107.688 billion and state expenditure of NIS 112.482 billion, leaving the public finances in a state of deficit to the tune of NIS 5.441 billion.

The government also reported an exceptional increase in revenues from taxes in July. The real rise of 0.8 percent (compared to July last year) brought income from taxes to NIS 14.17 billion and was attributed to, inter alia, the increase in VAT from 17 to 18 percent (effective from June 15, 2002) and hikes in duties on fuel and cigarettes. Discounting these changes, income from taxes fell 3 percent in real terms, reflecting, according to the treasury, the deepening recession.

The Income and Land Taxes Department collected revenues of NIS 7.9 billion in July. This was 0.6 percent less than in July of last year. In the first seven months of 2002, the department collected NIS 48.7 billion - 10.3 percent less than in the corresponding period of 2001. The Customs and VAT Department collected NIS 5.95 billion in July - 3.2 percent up on yearly comparisons. Division manager Eithan Robb attributed this increase to a 10 percent rise in VAT revenues.