Figures released by the Ministry of Finance yesterday evening show a small surplus in tax collection in the first quarter of this year, in comparison with the ministry's collection forecast, of just NIS 700 million. The consequence is that the chances of a tax cut, as promised by Minister of Finance Moshe Kahlon, are now much lower. Kahlon made his promise conditional on the first quarter state revenues numbers. Because of the small surplus, ministry officials will presumably present an unequivocal stance that the actual numbers do not indicate any permanent growth in revenues, and that there is therefore no room for a tax cut, seeing that revenues over the remainder of the year could certainly be lower than forecast.
The announcement by the Ministry of Finance states: "In total, in the first quarter of 2018, in comparison with the appropriate proportion of the annual tax collection forecast, there is a variance of NIS 0.7 billion, representing 0.9% of total tax collected in the quarter. Tax collected in March totaled NIS 26.3 billion. In the first quarter, tax collected totaled NIS 80.8 billion, 6.3% more in nominal terms than in the corresponding period last year."
Government spending figures indicate a rising excess in defense spending. According to the Ministry of Finance announcement, defense costs so far this year have risen 8.1% in annual terms. In the original budget, a reduction of 0.5% in defense spending was planned, in comparison with the estimate of actual spending in 2017, which itself exceeded the approved budget. Spending by civilian ministries has also shot up since the beginning of the year, by 9.6% in annual terms. The planned growth in spending was 5.3% over the estimate of actual spending in 2017.
Published by Globes [online], Israel business news - www.globes-online.com - on April 10, 2018
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