The Knesset Finance Committee is due to decide within weeks to halve the duty-free allowance for cigarettes to one carton per person instead of two. An estimate in today's discussion of the proposal said that it would generate NIS 300 million in tax revenues a year.
Cigarette makers, importers, and duty-free concessionaires told the Finance Committee that they oppose the proposal. An activist from the Association for Democratic Progress disrupted the meeting, calling for the removal of paid lobbyists, and was ejected from the room.
Minister of Finance Yuval Steinitz has already signed the directive, but the Finance Committee has not yet approved it. Finance Committee chairman MK Moshe Gafni (United Torah Judaism) wants to hear the position of the Ministry of Health on cigarettes' health hazards first. He also wants the Ministry of Transport to state the financial impact of the proposal on the Airport Authority's revenue, and the importers' position about the strengthening of the market in contraband.
James Richardson Israel CEO Avi Ben-Hur said, "In the best case, government revenues will increase by NSI 70 million, and the net value of the measure won't exceed NIS 30 million. You do not institute a reform for this, which will slash the profits of a company that operates on the basis of a concession through 2014. This is a change in the rules of the game in the middle of it."
Published by Globes [online], Israel business news - www.globes-online.com - on February 1, 2012
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