Israel’s government passed the budget for 2025 on 1 November 2024.

The 2025 budget includes various tax hikes, such as an increase in the standard VAT rate from 17% to 18% and spending cuts on most ministries. The Israeli Cabinet cited that tax increases and reductions in government spending are necessary to fund the war with Palestine, which is now in its second year.

The 2025 budget’s several tax increases and spending reductions total around ISL 40 billion. The total expenditure was 744 billion shekels (USD 199.23 billion), of which ISL 161 billion was allocated for debt servicing.

Prime Minister Benjamin Netanyahu indicated that defense funding might be increased, and additional funds may be added to the budget before it is presented for parliamentary approval in January 2025 or through a supplemental budget.