The Israeli government is scrambling to curb a burgeoning budget deficit, with new taxes expected to be declared in the coming days and spending cuts in the offing.

Israeli Prime Minister Benjamin Netanyahu has recently instructed the Finance Ministry to implement immediate steps aiming at narrowing the deficit, mainly via increased taxation on tobacco, alcohol, jet fuel and the rich, the Yedioth Aharonot daily reported Monday in its business and finance supplement.

The price of a pack of cigarettes is due to rise 10 to 12 percent and alcoholic beverages by more than 30 percent, while the government is considering imposing a surcharge on taxpayers with a gross monthly income of 80,000 shekels (about 20,000 U.S. dollars). The increased taxation is expected to generate revenue of 1 billion shekels (250 million dollars), said the report.

As well, Israeli government ministries are bracing for across- the-board budget cuts of up to 250 million dollars, with social and welfare services expected to be hardest hit.

The taxes and cuts were spurred by projections that the budget deficit could exceed 4 percent of GDP by the end of the year -- double the deficit target originally set by the government for 2012 and 0.7 percent higher than the revised deficit of 3.3 percent. The Finance Ministry warned that economic stability would be undermined unless emergency measures are implemented.

Senior treasury officials who attended a meeting with Netanyahu on Sunday, however, voiced concern over his decision to delay a cabinet vote on raising corporate taxes, a move expected to enrich the state's coffers by some 750 million dollars in the coming year.

In parallel, the government has reportedly put off discussions over its spending plans for 2013, and has so far set the deficit target for that year at 3 percent of GDP.

"We feel that the prime minister is not in a rush to approve the state budget for 2013, but is rather content with undertaking necessary preventive measures," a senior treasury official told Yediot. He spoke anonymously because Netanyahu ordered a blackout on all discussions concerning the budget.

The official added that the ongoing delay in approving the budget, as well as the implementation of a host of economic plans and reforms, point to Netanyahu's intention to call early elections next year.