Small and independent businesses continue to absorb the bulk of the damage

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While for businesses with a turnover of over NIS 100 million the median decrease (ie half of businesses of this size were more affected and half less) was 7.2% (32.1 million in May and June last year compared to 29.7 million this year), the median decrease in transactions for businesses with a turnover of Up to NIS 300,000 was 34.1% (from NIS 22,000 to NIS 14.5 thousand).

This emerges from an analysis of the VAT reports for May and June published today (Sunday) by the Tax Authority. The data show that in May and June, on average, the rate of decline in turnover increases the smaller the business.

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The median damage to businesses with a turnover of between NIS 5 million and NIS 20 million was 11.3% (from 1.34 million in the corresponding period last year to 1.19 million in May and June this year). The median decrease in the turnover of transactions for businesses with a turnover of up to NIS 300,000 was 34.1% (from NIS 22,000 to NIS 14.5 thousand).

A store that closed because of the corona Photo: Uriel Cohen

In total, there was an average decrease in turnover in May and June of 7.7% compared to last year, which is less pessimistic compared to a decrease in March and April – then a decrease of 13.7%, but as stated this does not reflect the full picture. They also usually do not have a stable financial backing.

The distribution of dealers by a percentage decrease in turnover also shows that most of the harm is among small businesses. 20% of the businesses whose turnover is up to NIS 300,000 per year have experienced a decrease of over 80%. While only 6% of businesses that roll over NIS 100 million have experienced a decrease of this magnitude. 41% experienced a decrease of over 40% among businesses with a turnover of up to NIS 300,000, and 33% among businesses whose turnover ranges from NIS 300,000 to NIS 1 million.

An examination of the turnover reported for VAT by industry groups shows that in most industries in which there was a severe injury in activity in March-April, the injury moderated two months later – except for the arts and entertainment industries where the injury rate remained very high – 46% and 44% respectively. Another is the “hospitality and food” industry, which suffered a very severe damage to the total turnover in March-April (55%), which moderated very little and stood at 42.7% in May and June.

At the same time, there are industries in which only a slight decrease was recorded, such as agriculture (2.4%) or industry and trade (3.8% each). Only in one industry was there an increase in the turnover of transactions – information and communication services (high-tech industry), which increased by 4.1%.

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