The significance of the move is that existing tax benefits will be reduced putting thousands of shekels onto the price of new cars, particular smaller and cheaper models.
The Tax Authority has notified car importers that the Green Tax on new vehicles will be revised on August 1. The Green Tax update will be stricter on emissions, the criteria for which the level of the "environment" tax is set. The significance of the move is that existing tax benefits will be reduced putting thousands of shekels onto the price of new cars, particular smaller and cheaper models.
However, if the relatively strong foreign currency exchange rate persists then car importers may be able to absorb the full or part of the cost of the hike. It should be noted that the final level of emissions published this week by the Tax Authority is stricter than initially indicated resulting in a higher than expected car price hike.
The new tax is likely to bring the Ministry of Finance an extra NIS 400-500 million revenue.
Published by Globes [online], Israel business news - www.globes-online.com - on June 4, 2013
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