Finance Ministry prepares plan to prevent increase in deficit, fund defense, for next government

The Finance Ministry has prepared a plan of harsh economic measures for the next government, including ending a gasoline subsidy, new taxes, and cuts to coalition funds, to finance a defense budget expected to reach NIS 187 billion and prevent an increase in the deficit. The plan was prepared in cooperation with the Bank of Israel.

Even before the exit polls of today's elections are known, the Finance Ministry has prepared a plan of harsh economic measures for the next government. The plan aims to finance the defense budget, expected to reach NIS 187 billion, and prevent an increase in the deficit and debt-to-GDP ratio. Some measures were planned in cooperation with the Bank of Israel. The gasoline subsidy, costing over half a billion shekels, will end Saturday night, causing prices to surge by at least NIS 1 per liter. Other measures include mandatory reporting and taxation of rental income from the first shekel, a tax on international content providers (the 'Netflix tax'), and reducing tax benefits on pension contributions. Revenue from these measures is estimated at NIS 10 billion. The plan also includes sharp cuts to coalition funds and efficiency measures across government ministries. The next government will need to pass a 2027 budget quickly.