Record tax revenues collected in January

Moshe Kahlon Photo: Yonatan Bloom

Israeli tax revenues reached a record NIS 27.6 billion in January, up from last year's NIS 26.8 billion record.

Government tax revenues totaled a record NIS 27.6 billion in January, improving on the previous record of NIS 26.8 billion set in January 2016, resulting in a NIS 4.2 billion budget surplus for the month. The budget deficit in February 2016-January 2017 was a mere 2.1% of GDP. The Ministry of Finance stated that a budget surplus was a frequent occurrence in January, because revenues are usually high and spending low in this month.

The Ministry of Finance announcement said that the figure included a "one-time NIS 1.2 billion payment from a capital gain on the sale of a large company." The Israel Tax Authority declined to release particulars about the deal involved, but market sources believe that it involves the sale of Keter Plastic in July, in which brothers Yitzhak and Sami Sagol sold 80% of their private company to BC Partners for $1.4 billion (controlling shareholders currently pay 30% capital gains tax).

Another figure that distorted state tax revenues in January in the opposite direction was the record car sales in December ahead of the January 1, 2017 revision in the environmental tax formula. Car buyers brought forth their purchases to December 2016, thereby increasing indirect tax revenues in that month by NIS 1.8 billion at the expense of the early months in 2017, mainly January.

Excluding the effects of the one-time deal on the one hand and December car sales on the other, total January tax revenues grew 3% in real terms, compared with January 2016. Revenues from direct taxes were up 6%, while revenues from indirect taxes were down 2%.

Published by Globes [online], Israel Business News - www.globes-online.com - on February 9, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Moshe Kahlon Photo: Yonatan Bloom
Moshe Kahlon Photo: Yonatan Bloom
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