Israelis’ Tax Burden Continues to Fall

Israelis paid slightly fewer taxes in 2018 compared to a year earlier, OECD statistics show. The tax burden fell by 0.1% in 2018 over the amount paid a year earlier. Tax payments amounted to 31.1% of Israel’s GDP in 2018, compared to 32.5% in 2017.

The average tax burden among OECD countries is 34.3%, with the tax burden increasing steadily over the past decade. In 2000 the average OECD tax burden was 33.8% of GDP; in Israel that year, the figure was 34.9%. Finance Ministry officials said that taxes in Israel would fall even more, stabilizing in 2023. Israelis are expected to pay lower taxes as tax receipts from sources such as corporate tax and royalties on natural gas increase.

About half of the OECD countries have tax burdens amounting to between 32% and 40% of their GDP. The highest tax burden is in France, where taxes amount to 46.1% of GDP. The lowest is in Mexico, where that figure is 16.1%.

Tax officials said, however, that it was difficult to compare taxation in different countries, as the social benefits between countries vary. For example, in some of the higher-taxed countries, pensions are collected and paid by the government, whereas in Israel pensions are based on savings.