Israel’s fiscal deficit continues to shrink. The deficit for the twelve months to the end of March stood at NIS 23.4 billion, 1.4% of GDP, after a 2.2% deficit for the twelve months to the end of February, the Ministry of Finance, the Accountant General, reported today.
March was the third consecutive individual month with a fiscal surplus. Since the beginning of the year, Israel has recorded a financial surplus of NIS 23.4 billion.
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The twelve-month deficit as a ratio of GDP is at its lowest level since 2008. A year ago, it was over 12%.
The state’s revenue for January-March stood at over NISD 125 billion, an increase of 29.3% over the corresponding period last year. Along with the increase in revenue, the finance ministry has benefited from the fall in expenditure, which has come down by 15.2% to NIS 102 billion within a year. The main reason for the decline is the loss of the state’s safety net during the coronavirus pandemic for businesses and the unemployed.
Last week, Finance Minister Avigdor Liebermann announced a reduction in excise duty on fuel to NIS 0.50 per litre. Lieberman explained that the increase in state revenue allowed them to make up the shortfall, and it now turns out that the increase in state revenue from fuel excise taxes alone in March was enough to finance the move. The total revenue from fuel excise duty in March 2022 was NIS 1.9 billion, up 23% over March last year.
The state’s revenue from direct taxes grew by no less than 26.6% in the first quarter of 2022 as compared to the same quarter of 2021. Revenue from indirect taxes increased by 12.2%, while revenue from duties increased by 10.4%.
On the other hand, import revenue fell 14% in real terms to NIS 1.9 billion in March. The Ministry of Finance explains the “relatively moderate import of vehicles in March 2022 as a result of the continued shortage of microprocessors for vehicles, and the decline due to the crisis in Ukraine, which has affected the supply chain of components and has led to a raw material shortage.” .
Published by Globes, Israel Business News – en.globes.co.il – on April 10, 2022.
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