Israel’s fiscal deficit doubled to 0.6% of GDP at the end of May 2023, reaching NIS 10.7 billion over the past 12 months, according to the Finance Ministry’s General Accountants’ Department report. In May alone, the fiscal deficit amounted to 4.4 billion shekels, compared to a fiscal surplus of 1.3 billion shekels in May 2022. The fiscal surplus has diminished since the beginning of 2023 to just 13 billion shekels.
Israel’s fiscal deficit widened to 0.3% of gross domestic product, or NIS 4.9 billion, in the twelve months ending in April 2023, up from 0.01% in the twelve months ending in March 2023.
State revenues in the first five months of 2023 declined by 4.2% compared to the same period last year, when revenues were particularly high. At the same time, government spending increased by 8.7%, creating a deficit as a result of lower revenues and higher spending. The trend worsened in May compared to April when revenue fell 3.2% and expenses rose 6.9%.
In addition to the increase in spending, the Ministry of Finance explains that the approval of the budget last month, “allows an increase in the 2023 budget compared to the previous budget by more than 25 billion shekels, which was already expressed in the increase in spending in May.”
Tax collection in May 2023 amounted to 34.1 billion shekels, compared to 37.3 billion shekels in May 2022. The tax authority’s revenue decreased by 10%, direct taxes decreased by 11%, and indirect taxes decreased by 9%.
The state’s real estate tax revenue reflected the market’s problems. The revenues of this sector amounted to 1.3 billion shekels in May 2023, down 52% from May 2022. The collection of improvement taxes decreased by 42%, and the real estate purchase tax decreased by 57% compared to last May.
Published by Globes, Israel business news – en.globes.co.il – on June 8, 2023.
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