OECD urges significant cut in car purchase tax

Regulator signals banks to keep dividends low

OECD: There is no justification for such a high purchase tax on cars.

As "Globes" first reported, the OECD advices Israel to slash the purchase tax on private cars. The recommendation in included in the OECD final report on Israel's accession to the organization submitted to the Ministry of Finance yesterday.

The chapter on taxes harshly criticizes the purchase tax on cars, saying that there is no justification for such a high purchase tax.

The Ministry of Finance said in response that this was a "secondary issue". Nonetheless, vehicle industry sources believe that the ministry may present a long-term timetable to lower the purchase tax on cars to 60% over several years, as one of the gestures that Israel will make to the OECD, in order to expedite Israel's accession.

Published by Globes [online], Israel business news - www.globes-online.com - on January 20, 2010