Israel prepares military mega-plan: population faces new taxes

Israel is considering a plan to increase defense spending to 400 billion shekels. Netanyahu's program involves developing its own defense industry. The current defense budget has grown to 158 billion shekels in 2026. Taxes may rise, but no concrete decisions have been made yet.

Israel is considering a significant increase in government defense spending. Prime Minister Benjamin Netanyahu's plan provides for additional investments of up to 400 billion shekels over the coming years. The program is aimed at military purchases and the development of its own defense industry, including the creation of stealth drones. Implementation may require exceeding budget limits. The current defense budget has grown from 60 billion shekels before the events of October 7 to about 158 billion in 2026. The Bank of Israel estimated the total cost of the war at about 405 billion shekels. The question of financing arises: a rise in the deficit and public debt is possible. Moody's maintained its Baa1 rating with a stable outlook, noting weak fiscal resilience. The next decision is expected in November. If spending is approved without cuts, taxes may rise, but no concrete decisions have been made yet.