The economic arrangements bill, which is set to be attached to Israel’s 2025 budget, does not include new taxes, but proposals such as freezing income tax brackets and National Insurance pensions and bonuses will be promoted separately, the Israeli business newspaper Globes reported.
The Israeli Finance Ministry issued the draft law, which includes reforms planned for next year, including measures in the areas of finance, real estate, government companies and others, according to the newspaper.
Bank tax
The bill proposes forming a committee to study imposing a special tax on banks in 2026 due to their high profits, after a special deduction imposed on them in 2024 and 2025 worth 2.5 billion shekels ($661.37 million).
Ashdod Port
The Finance Ministry plans to privatize the Ashdod Port. A joint ministerial committee will be formed to encourage the sale of shares in the port. It will submit its privatization proposal to Regional Cooperation Minister David Amsalem within 60 days, and the proposal will be submitted to the ministerial privatization committee within 90 days.
The Economic Arrangements Bill also proposes not to allow the Minister to interfere in the distribution of profits by government companies and proposes amending the Government Companies Law in order to simplify the distribution of profits to Israeli entities.
Last March, Ashdod Port CEO Shaul Schneider revealed that there was a plan to privatize the port, the only remaining port in Israel that is still run by the government.
He said at the time: “The events of October 7 (Operation Flood of the Al-Aqsa Mosque and the war on Gaza) changed the government’s approach and led to a rethink. You cannot privatize everything as a basis for competition. The Ashdod port must remain in the hands of the government.”
Israeli ports were affected by Houthi attacks in Yemen, which led to delays in shipping times as ships were forced to go around Africa via the Cape of Good Hope route.
Other suggestions
- To overcome the teacher shortage crisis, the draft proposed amending the school week to five days instead of six in the public school system, so that the school week coincides with the work week, the newspaper reported.
- The bill proposes closing 5 of the 31 government ministries, and tightening the Finance Ministry’s oversight of the defense budget, especially regarding salaries, pensions, and massive comprehensive agreements with municipalities to speed up housing construction.
rising cost
The cost of the war on Gaza is increasing with the multiplicity of fighting fronts, as Israel recorded a budget deficit of 12.1 billion shekels ($3.24 billion) last August, according to the Israeli Ministry of Finance, which indicated that the deficit-to-GDP ratio rose during the 12 months until last August to 8.3% compared to 8% in the previous month, and compared to a target of 6.6% for the entire year 2024.
Spending on the war in Gaza and its repercussions, which broke out last October, amounted to about 97 billion shekels ($26 billion).
