Israel’s deficit has dropped to zero: 0.04% in May, the lowest deficit level since January 2008, ie 14 years.
State revenues since the beginning of the year stand at NIS 206.3 billion, an increase of 25.4% compared to NIS 164.5 billion in the corresponding period in 2021. On the other hand, government expenditures decreased from the beginning of the year to NIS 173 billion, compared to the corresponding period of NIS 199.3 billion. 13.2%. Israel’s total budget surplus since the beginning of the year stands at NIS 33.3 billion, compared with a deficit of NIS 34.8 billion in the corresponding period.
The budget surplus in May amounted to NIS 1.4 billion, compared with a deficit of NIS 7.8 billion in May last year. The state brought in NIS 38 billion in May, including NIS 1.2 billion, an exceptional amount for ‘deductions’. In real terms (taking into account inflation), the state’s revenue increased by 16% compared to the same period last year. The collection of direct taxes (salaries, etc.) increased by 24% and the collection of indirect taxes (VAT, etc.) increased by 6% and the collection of fees increased by 5%.
Since the beginning of the year, the state has recorded revenues of NIS 194 billion, compared with NIS 153 billion in the corresponding period last year.
The decline – because it no longer needs to help the economy get out of the corona
But it should be noted that the story is mainly a reduction in spending on economic aid following the corona. If last year the government spent NIS 32.7 billion on economic aid, then since the beginning of the year it has spent only NIS 3.6 billion, and after neutralizing the aid program, the government spent 1.7% more than last year.
It should also be remembered that the deficit was measured over the last 12 months. But there is also a debt that has meanwhile swelled and is already reaching a trillion shekels – this debt Israelis must eventually repay (or continue to roll over) and this has considerable interest costs. In fact, this is an expenditure of tens of billions of shekels each year from the state budget.
In fact, out of an expected expenditure of NIS 397 billion planned by the government for the whole of 2022, interest payments and the National Insurance Fund stand at NIS 57.7 billion, which is 14.5% of the state budget. Definitely a lot of money.
Full data:
Direct tax revenues
Direct tax revenues in May 2022 amounted to NIS 22.1 billion, compared with NIS 16.1 billion in May 2021. At uniform rates, direct tax collection in May 2022 increased by 24%.
Income tax from the self-employed and companies (gross) – in May 2022, the collection in this section amounted to NIS 8.9 billion, compared with NIS 6.4 billion in May 2021. At uniform tax rates, this is an increase of 33%. Collection from the self-employed (including shareholders in companies) increased by 17% while collection from companies increased by 40%. The increase in corporate tax is due in part to a high payment of about NIS 0.5 billion and to the finance industry.
Deductions (deductions from income tax from tenants and deductions at other sources, including from the capital market) – Collection of deductions in May 2022 amounted to NIS 13.1 billion, compared with NIS 10.1 billion in May 2021. Excluding payment in an exceptional amount, this is a 13% increase. Cumulatively in January-May 2022, an increase rate of 11% was recorded. In 2021, starting in the second quarter, a significant increase was observed ranging from 16% to about 30%.
Capital market – in May 2022, a gross collection of about NIS 0.4 billion was recorded, compared with 0.6 in May 2021. In real terms, this is a decrease of 29%.
Real estate taxation – Net income from real estate taxation in May 2022 amounted to NIS 2.7 billion, compared to NIS 1.4 billion in May 2021, an increase of 80%. The collection of praise tax increased by a high rate of 81%. In the case of purchase tax, an increase of 79% was recorded. As of July 2021, sharp growth rates of appreciation tax and purchase tax have been observed. May increase in praise tax significantly, but less than in January-March 2022. Purchase tax also observed a moderation in growth rates in recent times relative to growth in the second half of 2021.
Refunds – In May 2022, refunds from income tax and deductions amounted to NIS 1.5 billion, compared with NIS 1.4 billion in May 2021, an increase of 5%.
Revenues from indirect taxes
In May 2022, revenues from indirect taxes amounted to NIS 15.2 billion, compared with NIS 13.8 billion in the corresponding period last year. At uniform tax rates, indirect tax revenues increased in real terms by 6%. Cumulatively in January-May 2022, revenues increased, at uniform tax rates, by 9% compared to January-May 2021.
Value Added Tax – Total net income from VAT in May 2022 reached NIS 11.1 billion, a real increase of about 8% compared to collection of NIS 9.4 billion in May 2021. Revenue in May 2022 includes a high collection of NIS 0.5 billion on investment, amount Which is expected to be offset by refunds later this year.
Import Purchase Tax – Revenues from Purchase Tax in May 2022 amounted to NIS 1.7 billion, a real decrease of 10% compared to May 2021. The decrease is mainly explained by low imports of vehicles in May 2022 (due to a global shortage of vehicle supply) relative to the level The highest in May 2021. In the aggregate in January-May 2022 there was a decrease of about 7% in purchase tax revenues compared to January-May 2021. Excise tax – Revenues from excise duty, before deducting refunds of diesel, amounted to NIS 1.8 billion in May 2022, a real decrease of About 4% compared to May 2021, as a result of the reduction in excise duty on fuels.