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The spiraling global financial crisis has cost Israel's treasury billions in lost tax income. Just last night, the U.S. Federal Reserve cut a key interest rate by a hefty half-percentage point, hoping to block the spiraling credit crisis from tipping the United States into a deep and prolonged recession.

Here at home, economists estimate that tax revenues this year could fall as much as NIS 5 billion short of the target set in the 2008 budget.

As for the year 2009, Finance Ministry officials are already projecting that tax revenues will decline as much as NIS 10 billion from the projection on which the 2009 draft budget is based. If there has been any surprise, it's the sheer speed at which the drop in tax collections has moved. Treasury officials had not expected a loss this significant in 2008.

Finance Ministry budget department officials had been expecting tax revenues to be about NIS 190 billion this year, consisting of NIS 103 billion in direct tax (income tax), NIS 82 billion from indirect taxes (VAT, Customs), and NIS 5 billion from various levies. That revenue forecast was based on an estimated GDP growth of 4.2%.