Finance Ministry exploring digital budget, giving ministries more independence

Looking toward the next budget, the ministry is aiming to create a simpler, more readable, and understandable budget that can be explored digitally.

Finance Minister Yair Lapid 370 (photo credit: Marc Israel Sellem/The Jerusalem Post)
Finance Minister Yair Lapid 370
(photo credit: Marc Israel Sellem/The Jerusalem Post)
The Finance Ministry is working on ways to make the budgeting process more transparent to the public, including publishing a digital budget and experimenting with giving ministries more financial independence.
In October, the ministry acceded to lawmakers’ requests to give them a weeklong headsup on proposed budgetary changes, so that members of, say, the Knesset Finance Committee, could submit questions and receive clarifications before having to vote on the changes.
Now, a spokesman said on Thursday, the ministry will be posting the proposed changes online to allow the broader public access before the Knesset takes them up for discussion.
Finance Committee member MK Stav Shaffir (Labor) praised the move, saying “from my first day on the Finance Committee, I have been fighting the faulty procedure in which hundreds of millions of shekels from Israeli citizens’ tax money changes hands without public knowledge, without Knesset oversight, in a fixed game.”
Looking toward the next budget, the ministry is aiming to create a more simple, readable and understandable budget that can be explored digitally.
“Because it is all of our tax money, the budget division is operating to make the state budget accessible to the public to advance a deeper conversation related to the budget,” said Finance Ministry deputy budget director Yael Mevorach, according to Army Radio.
According to the Finance Ministry’s spokesman, it is also experimenting with a way of easing the burden on ministries themselves. Five ministries – environment, agriculture, culture and sport, science and technology, and senior citizens – will be in a pilot program that allows them to control their own budgets.
The ministries will be able to transfer allocated funds from program to program as they see necessary without having to seek approval from the Finance Ministry each time.
The move is intended to reduce bureaucracy, increase efficiency and empower the ministries.
The caveat: They cannot request additional funds from the Treasury if they squander their budgets.
The Finance Ministry also released its monthly budget figures Thursday, revealing another drop in the 12-month rolling deficit, which fell to 2.7 percent of GDP. In the previous two-months, the rolling deficit was 3%, on par with the 2014 deficit target.
Part of the reason is that tax revenues in January and February jumped 16.2% from the same period a year earlier, reaching NIS 19.8 billion.
In November, Finance Minister Yair Lapid canceled income tax increases scheduled for 2014, saying that the budget’s good performance did not warrant them.
February showed an unexpected rise in tax collection, which grew 15% while direct taxes were 20% up on February 2013. Part of the rise was due to a dramatic fall in income tax rebates in February 2014 compared with February 2013 when there was an exceptional level of rebates.
The figures show that over the past two years tax collection has risen at an annual rate of 4%.
Analyzing tax collection data shows a rise in virtually every area. Collection from income tax deducted at source was up 3.4%, tax from the capital market soared 25% and from real estate rose 23%. On the other hand companies tax collection fell 5%. Value-added tax collection rose in part because the tax rate has risen to 18% from 17% last year, while purchase tax collection on imports rose 10%.
Globes contributed to this report.