Government revenues from taxes totaled NIS 13.2 billion shekels in September, a fall in real terms of 4.7% from the same month a year earlier, the Finance Ministry said on Sunday.

Against August 2002, tax revenue rose by 19%. But from the annual perspective, the situation is worrisome. The state's tax income for the first nine months of the year fell a real 5.8% to NIS 111.6 billion, reflecting a continuing slowdown in economic activity, the ministry said.

Revenues would have been down seven percent in real terms in the first nine months of the year if the government had not raised taxes on diesel and cigarettes in April and value added tax by 1% to 18.0% in June, the ministry said.

"The September collection figures are better than the previous months," the treasury said, adding that no conclusions could be reached regarding the trend. Tax collection is highly variable by nature, partly due to the timing of tax refunds, or the juxtaposition of Jewish holidays.

Israeli state revenues are expected to fall sharply this year because of the recession, with the economy battered by the global slowdown and the impact of the two-year intifada, which has slashed tourism income and construction activity.

Revenue from income and property taxes in September sank 14.7% in real terms to NIS 6.7 billion. For the first nine months of the year, income and property taxes fell a real 12.0% to NIS 61.2 billion.

Value added taxes and customs duties in September rose a real 8.5% to 6.3 billion shekels, while in January-September VAT and custom taxes rose 3.1% to 47.5 billion shekels.

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