The Ministry of Finance plans to change the use value of company cars to include "employees' free fuel, in order to reduce travel by the car fleet," as part of the national plan for the reduction of air pollution, which the cabinet approved at Sunday's meeting.
The plan states, "In accordance with the recommendations of the OECD in its 2011 report on Israel's environmental performance, and following the cabinet decision (of 2010), the Minister of Finance, in consultation with the Minister of Environmental Protection and the Minister of Transport, shall review and recommend measures to reduce travel by leased cars. The recommendations will be submitted to the cabinet by December 31, 2013."
The plan goes on to state that this will be achieved by "changing tax rules in the leasing market to reduce air pollution from driving."
The Ministry of Finance's Budget Department has been trying for a long time to include a proportional fuel component in the company car use value, and a recommendation to this effect was included in a report by Shaldor Strategic Consulting Ltd., which was submitted to the department in 2012. However, all recommendations on this matter were withdrawn under public pressure.
The use value of a company car, which is included in individuals' taxable income, generates NIS 5 billion in tax revenues a year.
Published by Globes [online], Israel business news - www.globes-online.com - on August 26, 2013
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