Israel’s cumulative fiscal deficit for the twelve months to the end of May was zero. This is the first time the government has recorded a deficit of zero in a period of 12 months since 2008. According to initial estimates released by the Central Bureau of Statistics today, in May itself there was a surplus of NIS 1.4 billion. The fiscal surplus for 2022 to date is NIS 33.3 billion. In the corresponding period of 2021, there was a deficit of NIS 34.8 billion.
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Government revenue for the first five months of 2022 amounted to NIS 206.3 billion, 25.4% more than in the corresponding period of 2021. The government spent NIS 173 billion in the first five months of this year, 13.2% less than in the corresponding period.
May was the fifth month in a row that there was a financial surplus. There has been no such monthly surplus since 2007. The accumulated deficit figures show a decrease of 0.5% in 12 months to the end of May from 12 months to the end of April.
The Ministry of Finance explains the figures by saying that government spending has fallen in line with stable, significant growth in tax revenue as a percentage of GDP, mainly due to the closure of aid programs linked to the Covid-19 pandemic.
In the first five months of this year, the government spent 3.6 billion NIS on such assistance programs, which is comparable to 32.7 billion NIS in the corresponding period in 2021. These are impressive figures, but at the same time keep in mind that the compensation , which the government promised the companies for losses caused by the Omicron Covid variant, has not yet been transferred to those entitled to it and is not reflected in the tax figures.
Taxation of real estate almost doubled in May. Net income from these taxes totaled NIS 2.7 billion last month, which is comparable to NIS 1.4 billion in May 2021. The collection of capital gains tax increased by 81%, while the collection of purchase tax increased by 79%.
There was also a jump in income tax recovery from the self-employed and from businesses. Central government revenue under this heading amounted to NIS 8.9 billion in May, which is comparable to NIS 6.4 billion in May last year.
Published by Globes, Israel business news – en.globes.co.il – on June 9, 2022.
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