Jerusalem, 27 October, 2026 (TPS-IL) — Israelis are likely to face higher taxes, rising utility bills and spending cuts after the October 27 election, as the incoming government prepares the 2027 state budget amid unprecedented defense costs.
Finance Ministry officials and the Tax Authority have warned of a potentially harsh budget featuring tax increases and the elimination of exemptions postponed during the election campaign.
Measures under consideration include restoring a one-shekel-per-liter fuel tax, raising electricity rates by an estimated 1.5% to 2%, and increasing public transportation fares by at least 4% in January 2027.
Proposals also include taxing funds for on-the-job training, tightening taxation of rental income, freezing income-tax brackets and credit points, and introducing new levies on property and vehicle use.
The Tax Authority is also examining tighter cash restrictions, cuts to public services, and pension reforms.
