Israel Tax Revenue Jumps Nearly 11%
The increase in government revenues has accelerated in recent months, but the state still has no approved budget.
The government collected taxes and fees totaling 23.9 billion shekels ($6 billion) in March, an increase in real terms of 10.9% after inflation when compared with the same month last year.
In the quarter as a whole, the government collected 69.4 billion shekels in revenue, a real year-over-year increase of 5.3%.
The March revenues came to 1.7 billion shekels more than expected, following revenues that were 1.3 billion shekels higher than expected for January and February combined.
The unexpected increase came from direct taxes, such as income, corporate and capital gains taxes, as well as other fees. Revenues from indirect taxes, such as the 18% value added tax, were in line with predictions. The growth in the tax take has accelerated in recent months in particular.
The government has been operating without an approved 2015 budget since January.
The coalition that had made up the outgoing Netanyahu government broke up near the end of 2014 and new elections were called before a budget was passed. As a result, the government is currently functioning on a month-to-month formula based each month on one-twelfth of the spending limits in last year’s annual budget.
For the first three months of 2015, government expenditures (excluding financing costs involving interest and principal) came to 57.8 billion shekels, an increase of 2.8% over the same period last year.
Finance Ministry data on government spending vs. revenue in March reveal that the spending deficit was relatively low for the month — 1.2 billion shekels, which was less than half the planned deficit for a single month. And for the first three months of the year, the government had a budgetary surplus of 700 million shekels compared to a 300 million shekel deficit for the comparable period a year earlier.
The accumulated deficit between April 2014 and March of this year was 2.63% of the country’s gross domestic product. That’s within range of the deficit target of 2.5% that the cabinet approved about two years ago.