Israel Health Tax To Be Extended

To help eliminate the NIS1 billion ($306 million) deficit in Israel's sick funds, collection of the new health tax is to be extended to non-salaried sources of income such as company dividends, and certain exemptions will be revoked. The Treasury believes the health tax revenues will be a chronic problem producing an annual deficit of around NIS1 billion for years to come.

The health tax was established in 1995 with the introduction of National Health Insurance. The NHI Law says the Treasury must clear any deficits resulting from collection of the tax revenues; this usually involves the transfer of money to the various sick funds. In June, the Parliamentary Finance Committee approved special funding of NIS81.4 million ($25 million) to the Meuhedet fund, within the terms of an agreement that by 1998, under an efficiency program, it will no longer be running a deficit.