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Finance Ministry submits budget proposal for 2017-2018: Greater deficit, lesser taxesAccording to the budget proposal submitted by the Israeli Finance Ministry for the years 2017-2018, the increase in public sector wages will be postponed by a year but will be enlarged, the national deficit will be increased, a lateral budget cut will be imposed on government offices and public expenditures will rise.
The Israeli Finance Ministry published its official budget proposal for the years 2017-2018 today (Monday). According to the proposal, Israel’s deficit or “national overdraft” will rise by 2.9%, a larger increase than was initially planned. The enlarged deficit is intended to cover the many expenses detailed in the budget.
As part of the deviation from the original budgetary framework, public expenditures will be substantially increased, with a 5% addition instead of the 2.7% initially planned. The budget proposal does not include any “painful” reforms or any damage to power bases such as unfunded pensions, but the Finance Ministry does intend on a 2% lateral budget cut in government offices, as well as taking surplus funds from the Jewish National Fund, the Israel Airports Authority and Israel’s national lottery Mifal HaPayis.
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In addition, the Finance Ministry reached an agreement with the Histadrut according to which the wage increase in the public sector will be delayed from 2018 to 2019, but will be enlarged in exchange. The Finance Ministry also intends on imposing taxes on owners of more than two apartments and on people who receive compensations exceeding 30 thousand shekels a month, as well as on preventing Kibbutz members from conducting tax planning.
In terms of benefits, the Finance Ministry noted the lowering of income taxes and corporate taxes that is expected to enter into effect.
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