The recovery of the economy: Data shows an increase of 30% in taxes in April: NIS 23.6 billion

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by Ifi Reporter Category:Capital Market May 6, 2021

The recovery of the economy is much broader than expected. April recorded a record state revenue for this month from taxes in recent years. Despite the holidays, total tax revenue in April 2021 was NIS 30 billion.
The data, which will be officially published on Sunday, show that this is an increase of close to 30% compared to the state's tax revenues in April 2019, before the corona crisis, which amounted to NIS 23.6 billion. In April 2020, of which the first closure was for 19 days, tax revenues were particularly low at NIS 21.9 billion.

The increase in tax revenues last month is due to an almost full opening of the economy (apart from foreign tourism and cinemas), a huge increase in private and public consumption, an increase in exports and a return of local industry to full output.
If the economy returns to full activity quickly, a further increase in tax revenues is expected, especially in consumption, since Israelis now complete a large part of the purchases of products that they did not purchase in the corona year.
In 2021 as a whole, the Ministry of Finance expects revenues of NIS 330.9 billion. Since the beginning of 2021, the Tax Authority has collected NIS 122 billion, compared with NIS 102 billion in the first four months of 2020. At this rate, an increase of at least 10% in tax collection is expected this year.
The high tax collection affects the reduction in the deficit, which was expected in these months, and may require less far-reaching measures of tax increases and cuts in the budgets of government ministries in the budgets of the coming years.
Data from the Automated Banking Services Company also indicate a jump in Israeli public spending in April, during which Passover and Independence Day fall. Israelis spent a total of NIS 31.838 billion on credit cards this month, compared with NIS 26.679 billion in April 2019 - a year before the corona crisis. This is a sharp jump of 60.24% compared to April 2020, during which the first hermetic closure took place, when Israelis spent only NIS 19.869 billion.
The amount in April this year is 10% lower than the amount the Israelis spent in March, which stood at NIS 35.340 billion. The reason why Israelis bought more in March is that this month falls on the eve of Passover. 
 

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