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Wednesday, 13 May 2015

Time to Stop Funding Israel - Here's Why

The state raked in some NIS 600 million more than expected in April, on top of the NIS 3 billion surplus accumulated from January to March, most of it from taxes.


Israel has billions of shekels in its coffers

Incoming Finance Minister Moshe Kahlon has a pleasant surprise in store for him at the treasury: Since the beginning of the year – Yedioth Ahronoth, Ynet’s sister publication, has learned – the state coffers are overflowing with a tax surplus totaling NIS 3.6 billion.

The Tax Authority’s collection efforts are paying off, with the state raking in some NIS 600 million more than expected in April. This follows the NIS 3 billion surplus accumulated from January to March. The surplus is made up almost entirely of direct taxes – income tax and, primarily, real-estate taxes.

The tax surplus is certainly a source of satisfaction for the treasury officials. The tax collection forecast for 2015, following adjustments stemming from canceled legislation due to the early election, stood at NIS 261.8 billion.

The Tax Authority’s revenues during the period January-April 2015 totaled NIS 88.8 billion, compared with NIS 84.5 billion in the corresponding period of 2014 – a real increase of 6.4 percent. 

The increase in revenues stems from income tax from companies and individuals, deductions and a rise in income from real-estate taxes.

On the other hand, while revenues from VAT and import taxes did indeed increase somewhat, the rise did not extend beyond the estimated range.

This indicates that the increase in tax revenues does not stem from increased economic activity. Instead, the spike in revenues is down to increased enforcement on the part of the tax authorities.

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