The Finance Ministry is seeking solutions to avoid raising general taxes over
the next two years, Treasury director-general Doron Cohen said on
“Taking money from everyone and imposing horizontal cuts on
everyone is not the right thing to do,” he said in an interview with Army Radio.
“There are tax exemptions in sums of NIS 15 billion to NIS 20b. There’s no need
to cancel them all, but we should eliminate distortions in the
Cohen drew the wrath of Interior Minister Eli Yishai of Shas
for suggesting that one policy that could hit the chopping block to help
increase revenue was the value-added tax exemption on fruits and
“Bringing back the idea of canceling VAT exemption from
fruits and vegetables is another attempt to sacrifice the weak sector to budget
cuts,” he said, promising to oppose such measures in the Knesset.
suggest the Treasury find creative and fair solutions for budget cuts, and not
try to recycle failed, tasteless ideas from the past that will harm the weak
sectors and middle class.”
Also on Thursday, the Finance Ministry
announced that in the first month of 2013, the state posted a budget surplus of
While a surplus is good news in comparison to the overall NIS
39b. budget deficit in 2012, which caused a political upheaval in the runup to
the general elections on January 22, the news is not as good as it may first
Differences in seasonal government spending mean that the budget
in January is not representative of the year. Despite the overall deficit in
2012, for example, in January of that year the government posted a NIS 6.1b.
surplus, more than double the current windfall. In comparison to last January,
expenditures rose from NIS 17.5b. to NIS 19b., while revenues fell from NIS
23.6b. to NIS 21.6b.
On the bright side, the tax revenues collected
exceeded expectations by about NIS 1b.
Until the government passes a
budget for 2013, it is operating on a “1/12 framework,: in which it disperses
government offices monthly funds equivalent to 1/12 of the previous year’s