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December 16, 1445
June 22, 2024 AD
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Hebrew media reported that finance ministry officials recommended that Finance Minister Bezalel Smotrich impose new taxes next year to raise an additional 30 to 50 billion shekels to finance the war.
Channel 12 News in the UK reported" During marathon discussions about the 2025 state budget, officials told Smotrich that the Hebrew State needed to send a message to credit rating agencies that it was serious about proper fiscal oversight and could not continue to increase debt spending because of the ongoing state of war between the Hebrew State and…"agitation" It brings huge cost to the country’s financial resources".
The report said the proposed measures include raising the current 17% value-added tax by two percentage points to 19%, reducing child allowances, freezing public sector wages, stopping inflation adjustments to income tax rates to generate more revenue and cutting the exemption of workers’ provident funds, which are mainly funded by employers.
Commenting on the meeting on Tuesday, Smotrich said the 2025 budget would be "Although it will be difficult, we will succeed in working in a fiscally responsible manner, meeting all needs on the war front and at home until victory, and putting the Israeli economy on a path of accelerated growth.".
The Bank of Israel estimates that the Gaza war cost NIS 253 billion ($67 billion) in defense spending, civilian needs spending, and lost revenue. tax Between 2023 and 2025.
With the budget deficit hitting 7.2% in May, above the 6.6% target for 2024, and ratings agencies downgrading the Hebrew state’s credit rating, a major fiscal adjustment as well as spending and tax increases on the revenue side are necessary to prevent a crisis in the deficit that could spiral out of control, the Bank of Israel and top economists warn.
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