A Review of Local Government Finance in Israel
This report provides a comprehensive analysis of the Israeli system of local government finance, with a focus on the role of the Israeli property tax, known as the Arnona. Local governments are financed through a combination of revenue, primarily from central government grants and from the Arnona, w...
| Autor principal: | |
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| Autor Corporativo: | |
| Formato: | Libro electrónico |
| Idioma: | Inglés |
| Publicado: |
Paris :
Organization for Economic Cooperation & Development
2022.
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| Materias: | |
| Ver en Biblioteca Universitat Ramon Llull: | https://discovery.url.edu/permalink/34CSUC_URL/1im36ta/alma991009704743406719 |
Tabla de Contenidos:
- Intro
- Foreword
- Acknowledgements
- Executive summary
- Key findings
- Introduction
- 1 The Israeli system of local government finance
- Local governments in Israel
- The role and functions of local governments in the Israeli fiscal system
- Expenditure responsibilities of the local government sector in Israel
- The economic size of the local government sector in Israel
- Reductions over time in local governments' operating budgets as a percentage of GDP
- The financing of local governments' budgets
- The financing of local governments' regular budgets
- The financing of local governments' irregular (capital) budgets
- Local government revenue comparisons with OECD countries
- Shared taxes in the OECD
- The variety of own-source taxes at subnational level in the OECD
- The property tax in the OECD
- The Arnona system: functioning and disparities
- How the Arnona functions
- Differences in Arnona revenue among local governments
- Central government grants to local governments
- Grants for education and social welfare
- General balancing grant
- Equalisation Fund grant
- Distribution of grants by socio-economic cluster
- References
- Notes
- 2 Diagnosis of the major problems with the Arnona and the financing of local governments in Israel
- The property tax as a local government source of revenue
- General evaluation of the Arnona
- Revenue sufficiency
- Economic efficiency
- Equity
- Administrative costs
- Buoyancy/stability
- Transparency and simplicity
- Autonomy
- Summary evaluation
- The impact of Arnona on land-use decisions
- The adequacy of local government public services
- Local government per capita expenditures by function
- The funding of public education
- The funding of social welfare
- The role of grants in reducing local government fiscal disparities
- References.
- 3 Policy recommendations
- Introduction
- Policy recommendations for improving the Arnona
- Policy recommendation 1: Reduce the large disparity between non-residential and residential Arnona rates by reducing non-residential rates relative residential rates
- Policy recommendation 2: Develop alternative sources of local government revenue, through taxation, user charges and income from assets
- Policy recommendation 4: Standardise the classification of types of property across the country and reduce the number of sub-classification categories
- Policy recommendation 5: The central government should establish and enforce a uniform system for measuring taxable area for purposes of implementing the Arnona (pending more comprehensive reform -see recommendations 9 and 10)
- Policy recommendation 6: Addressing the problems created by the current system of Arnona exemptions and discounts
- Exemptions provided to residential Arnona taxpayers
- Exemptions and rebates provided to non-residential Arnona taxpayers
- Policy recommendation 7: Allow some degree of rate setting by local governments. Extra revenues could be used to increase spending on delegated or discretionary functions
- Policy recommendation 8: The government should actively assist local governments in increasing their Arnona collection rate by providing training, technical assistance, and capital grants for the modernisation of computer systems
- Policy recommendations for reforming the Arnona
- Policy recommendation 9: Establish a value-based system of property taxation for all non-residential property
- Policy recommendation 10: Establish a value-based system of residential property taxation
- Policy recommendation 11: Consider increasing the balance grant and simplifying the allocation formula.
- Policy recommendation 12: Enhance cooperation among local governments by providing incentives for the merger of small neighbouring local governments, the joint provision of some public services, or the sharing of tax bases
- Policy recommendation 13: Support research to measure the quality of public service provision of local governments
- References
- Annex A. The valuation of immovable property
- Reference
- Blank Page.
