Gov’t sets deadline to finalize state budge
Bank of Israel: Next year’s budget must include significant expenditure cut; Sept 13 set for budget deadline.
Man pepper-sprays cop at social justice rally Photo: Sebastian Scheiner/Reuters
September 13 will be the date the government completes deliberations over next
year’s state budget, under a timetable released by Prime Minister Binyamin
Netanyahu and Finance Minister Yuval Steinitz.
The cabinet will hold its
first budget debate at its weekly meeting on September 2. The multi-year defense
budget will be the subject of a separate dialogue on August 15.
tax will rise for the second- and third-highest brackets on January 1, after the
Knesset approved the government’s multi-billion shekel tax hike package Monday.
Income will be charged as follows: less than NIS 5,200 per month – 10 percent;
NIS 5,201-8,880 – 14%; NIS 8,881-NIS 14,000 – 21%; NIS 14,001-20,000 – 31%; NIS
20,001-41,830 – 34%; NIS 41,830 and above – 48%.
All income above NIS
67,000 per month will be charged a 2% surtax. According to the Israel Tax
Authority, Israelis earning a salary of NIS 15,000 per month can expect to pay
additional income tax of NIS 49 per month once the changes come into effect next
Taking tax credits into account, men with no children will be taxed
NIS 1,937 per month; men with one child under the age of three will be charged
NIS 1,507; women with two children (one of them under five) will pay NIS 1,184;
women with no children will pay NIS 1,829; women with three children over 5 will
pay NIS 1,184; and women with three children (two under five) will pay NIS
Israelis earning NIS 20,000 per month will be taxed an extra NIS 99;
those earning NIS 40,000 per month will be taxed an extra NIS 352; and the lucky
few who earn NIS 100,000 will pay an extra NIS 1,037.
Those earning NIS
14,000 per month or less will be taxed at the same rate as this
Finance Minister Yuval Steinitz told Army Radio Tuesday that NIS
700 million in expenditure cuts approved by the Knesset for the remainder of
2012 will be the last spending cuts the government implements this
Meanwhile, the Bank of Israel has said that next year’s budget must
include a significant expenditure cut in order to avoid exceeding the spending
limit set by law. The law enables real expenditure to increase by 5%, but this
target is under threat given the high cost of multi-year plans adopted by the
government, the bank warned in its Monetary Policy Report on the first half of
“The expansion of budget commitments in 2013 and the slowing growth
rate in 2012 will make it difficult for the government to meet its deficit
targets for the next two years,” the report said.
The central bank
further warned that if indicators of an expected slowdown in economic activity
remain at current levels, its research department will likely revise 2013 growth
and inflation forecasts downward when it next publishes forecasts in
Based on the staff forecast formulated at the end of June, the
research department estimates the rate of growth in GDP will total 3.1% in 2012.