Israel’s state tax revenues from taxes and government ministries fees totaled some NIS 12.5 billion ($2.6 billion) in December 2002, a real drop of three percent compared with the corresponding month in the previous year.
The date for value added tax (VAT) refunds of some 0.5 billion Israeli shekels was deferred from December to January 2003. Based on uniform collection, deducting the influence of legislative changes and the differences which stem from tax refund timing, the collection in December would have dropped by a real rate of about 12 percent, compared with the corresponding month last year.
For the whole of 2002 state tax revenues totaled some NIS 146.7 billion, a real decline of five percent compared with the corresponding period last year. Deducting the legislative changes and the aforementioned timing differences, collection fell by some seven percent. The state tax revenue this year is some NIS 1.3 lower than the target of NIS 148 billion, set in the emergency economic plan.
The decrease in state tax revenues in 2002 stems from the ongoing slow-down in economic activity, which began in the last quarter of 2000. 2002 was characterized by a decrease in gross domestic product (GDP), an even larger decrease in business GDP, a sharp decline in real wages and a drop in imports.
State Revenue Director Meir Kapota added that the government tax burden, which is the ratio between state tax revenue and GDP, declined from 31.1 percent of GDP in 2001 to 30.2 percent of GDP in 2002. On a uniform basis, deducting legislative changes and the differences which stem from tax refund timing, the tax burden fell by 1.2 percent of GDP.
In 2002 the Department's revenue in budget definitions totaled some NIS 79.8 billion, a real decline of 11 percent. The net legislative changes did not influence collection significantly as the additional taxes were offset by the reduction of taxes. As a result, in spite of the deductions of differences which stem from the legislative changes, the Department's collection fell by a real rate of 11 percent.
The Department's revenue totaled some NIS 63.0 billion, a real increase of four percent. The increase in collection stems from a rise in VAT, the excise tax on diesel fuel and purchase tax on cigarettes as well as from delaying the VAT refunds of some NIS 0.5 billion from December 2002 to January 2003.
After deducting the impact of the delay in refunds and the legislative changes, there was no real change in the Department's collection in 2002 as compared with 2001. This stability of collection should be considered an achievement in light of the one percent decline in product and especially in view of the nine percent fall in consumption of heavily-taxed durable products. In 2002 the state revenues from fees totaled some NIS 3.9 billion, a real increase of about two percent compared with collection in 2001. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
