The Ministry of Finance published very positive data on the government's financial position today. According to the Accountant General's figures, the government had a budget surplus of about NIS 1 billion in September, as a result of larger than forecast tax collection, as well as a delay in tax rebates because of the holidays. The deficit for the first three quarters of 2010 (January-September) was approximately NIS 13.6 billion, only about 30% of the planned deficit of NIS 42.9 billion. This compares with a deficit of NIS 23.2 billion in the corresponding period last year.
Meanwhile, total tax revenues jumped by 11.2% to NIS 17.7 billion, compared with NIS 15.3 billion in September last year. Most of the increase in revenues was driven by a jump of about 20% in collections of direct taxes (income tax and companies tax), which totaled about NIS 8 billion. However, the Tax Authority says that because of the holidays, about NIS 1 billion of tax rebates were postponed to October.
In the first three quarters of the year, tax revenues amounted to approximately NIS 147.3 billion (approximately 80.5% of the amount planned for in the budget) compared with NIS 132.6 billion in the corresponding period last year. But more importantly, the Tax Authority reports that, from the beginning of the year to September, there was an accumulated tax revenues surplus of NIS 8.4 billion above the collection target, thanks to the growth in the economy, which exceeded Ministry of Finance estimates. However, the Tax Authority dampens the excitement at the favorable figures: "Trend analysis indicates a flat trend in revenues from both direct and indirect taxes," it says.
Published by Globes [online], Israel business news - www.globes-online.com - on October 5, 2010
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