Despite the fact that on Tuesday the government decided to set the deficit target for the coming year at 3% – double what was planned – there will be no way of avoiding new taxes, Finance Minister Yuval Steinitz said Wednesday.
"We intend to meet the new deficit target," Steinitz said. "And it requires that we take steps on taxes, as well."
According to the minister, the new tax schedule would be determined over the next month or two.
"After many discussions and consultations with international officials, including the director of the OECD, a deficit target of 3% was agreed upon, which is also a challenge. The move will allow (us) to ease, not cancel, the tax burden. Combined with other actions, it will help us preserve one of our important assets in this time of global crisis – the country\’s fiscal and budgetary integrity."
On Tuesday, Prime Minister Benjamin Netanyahu decided to raise the budget deficit target by half a percent over what was planned, meaning that there is no need to raise the VAT tax by 1%, a move that was planned for July 1 and was expected to net the state some NIS 5 billion.
The prime minister also decided to raise the deficit target from 1.5% to 3%, allowing the deficit to reach NIS 30 billion.
However, the decision does not countermand the need to cut some NIS 6.5 billion from the 2013 state budget.