Treasury: Natural gas to push growth to 3.5% in 2013

Israel’s economy will grow a surprising 3.5 percent in 2013, and 3.9% in 2014, as some of the country’s offshore natural gas fields begin production, according to the Treasury’s updated forecast.

Previously, the Treasury predicted that Israel would experience economic growth of 3% in Israel. The Bank of Israel’s current forecast is also for 3%, while the OECD is predicting the Israeli economy will grow at 2.9%.

Finance Minister Yuval Steinitz warned Sunday night that the improved growth forecast would not translate to increased tax revenues or jobs, saying that the impact of taxation on natural gas has already been taken into account.

According to the Israel Tax Authority, individuals with salaries of NIS 15,000 per month will see their net monthly income fall by NIS 49 each month when updated income tax rates come into effect on January 1. Individuals on NIS 20,000 will lose NIS 99 each month, while those on NIS 40,000 will lose NIS 352 and those on NIS 100,000 will lose NIS 370.

Income will be charged as follows in 2013 (prior to tax credit reductions): less than NIS 5,200 per month – 10%; 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.

Yesh Atid Chairman Yair Lapid slammed the government on Monday for going through with the tax hike.

“Before forcing its hand once again into the pockets of citizens who cannot finish the month, it should change its priorities by freezing funds being invested in settlements that are not part of the larger settlements blocs and by ending payments to haredis who do not work,” Lapid said.