The tax benefit on electric vehicles will end next week, and starting January 1, the tax on the purchase of these vehicles will be doubled: instead of 10% today, it will be 20%, and in 2024 it will be 35%.
The tax benefit was for a maximum amount of NIS 75,000, and now it will drop to NIS 60,000 - meaning an increase of up to NIS 15,000 in the price of electric vehicles.
This is an automatic application of a tax outline that was drawn up a few years ago, even before Lieberman was finance minister.
More electric vehicles?
Not sure, photo: Oren Ben Hakon
The discussion of the finance committee that was supposed to take place today (Monday) at noon was cancelled, because according to the decree of the treasury the tax would have increased in any case, because the finance committee does not have the authority to stop the increase of this tax.
The outline of the gradual increase in taxation was accepted in 2019 and was originally intended to examine the entry of electric vehicles into the country.
However, these vehicles have become very popular in the Israeli market, so the Treasury's assumption is that there is no longer a need for the tax benefit.
The price increase of thousands of shekels.
BYD Auto 3 and Geely Geometric, photo: Yuli Kisliov
It should be noted that at the time the outline was determined, battery prices were expected to decrease in 2022-2023.
In practice, due to the war in Ukraine and the commodity crisis, the prices of the batteries actually increased, so it seems that there is no economic sense in making the electric vehicle more expensive.
According to Chen Herzog, the chief economist of the consulting firm BDO, "Israel lags behind European countries in the penetration of electric vehicles. The Israeli government's policy is in conflict with its climate goals and statements. While the penetration rate of electric vehicles in Israel is about half as low as in European countries, Israel subsidizes gasoline, and increases the tax on an electric vehicle".
The chairman of the finance committee, MK Moshe Gafni, said in the Knesset plenum about the tax on electric vehicles that is supposed to increase on January 1st: "It is completely illogical. I cannot understand this unnecessary tax increase."
MK Eli Dellal (Likud): "This is an unwise and above all absurd step.
We need to encourage people to drive electric vehicles.
This is the future for a greener environment with a lower pollution ratio.
Beyond that, unlike the previous government, we need to encourage lowering taxes and not the other way around."
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