The estimated cost of Operation Protective Edge is 4.5 billion shekels, but Israel Tax Authority head Moshe Asher says he will do his best not to raise taxes, though he can’t promise anything, Globes reported on Wednesday.
“Preliminary estimates talk about NIS 4.5 billion in damage in terms of lost GDP,” which Asher calculated would translate into “NIS 1 billion in lost taxes.”
“Even before the fighting we saw a slowdown in the economy and Operation Protective Edge is now added to this. We have our finger on the pulse to see where the trend is leading. Direct damage is estimated at about NIS 50 million.”
When asked where the money will come from if not from taxes, he explained that “the compensation fund which finances compensation separately from the regular budget accrues about NIS 1 billion each year. At the moment, it has NIS 5.5 billion. Direct damage will come from that fund.”
In other war-related financial news, the Ministry of Finance announced the transfer of a further NIS 300 million to the Ministry of Defense after it was disclosed last week that it had already paid NIS 300 million before Operation Protective Edge began. The special budget is to pay for mobilizing reservists and the high costs of the military operation, which is estimated at NIS 10 billion.