The Ministry of Finance published today (Tuesday) for public comments an order reducing the excise tax applicable to coal in order to mitigate part of the increase in the electricity tariff.
According to the decree, the tax on coal will be reduced from NIS 105.40 per ton to NIS 1 per ton - which will result in a reduction of approximately 2% of the electricity tariff.
We will remind you that as of January 1, the electricity tariff increased by 8.2%, so the signing of this order by the Minister of Finance will lead to the increase being moderated to about 6.2%.
However, sources familiar with the matter told "Israel Hayom" that there are additional measures that are now being considered to moderate or even cancel the increase in the electricity tariff even further.
In the order it is proposed that the cancellation of the tax will be in effect until the end of 2023. The loss of the state's tax revenues due to this order is expected to amount to NIS 440 million.
As you may recall, Netanyahu promised to freeze the tariff for electricity, water and property taxes and last week convened the "Economic Cabinet" for the first time, in which Minister Smotrich, Netanyahu's economic advisor Prof. Avi Simhon, and Finance Minister Sharia Damsky and Economy Minister Nir Barkat participated.
As published in "Israel Hayom", in the discussion it was decided to freeze the rate increase of the inflation generators in full or in part even before the submission of the budget, and this as part of the immediate steps to reduce the cost of living which will be presented soon.
As you may remember, at the beginning of the month several price increases came into effect which affect the expenses of households and the business sector: the electricity rate by 8.2%, the water rate by 3.5%, the property tax rate by 1.4% and the fuel rate by 9 AJ per liter.
This, in addition to the rising prices of food products, cleaning and toiletries, and for some of the public also the rent.
Also, last week the governor of the Bank of Israel raised the interest rate in the economy to its highest level since 2008 - 3.75%.
The increase in the monthly repayment of the mortgage payments adds up.
The President of the Federation of Manufacturers and the Chairman of the Presidency of Employers and Businesses, Dr. Ron Tomer, stated that "We welcome the decision of the Minister of Finance to cancel the excise tax on coal. This is a step in the right direction that will moderate the increase in electricity rates. This step joins the decision of the Electricity Authority to partially adopt the proposal of the Association of Manufacturers to distribute the excess costs, in a way that prevented an additional increase of 5.2% in electricity rates (the Authority's decision for a rate increase of 8.2% instead of 13.4%). All price increases can be prevented, and now we will continue to act in order to completely stop the increase in electricity rates. As which we presented to the Electricity Authority, this can be done by spreading the excess costs more widely."
In the meantime, earlier today, the Minister of Finance began promoting the abolition of the tax on disposable utensils and published for public comment a draft order canceling the tax imposed on disposable utensils by the end of 2023, with the expectation that the abolition of the tax will lower the price of the products for the consumer .
As a reminder, starting from November 2021, a purchase tax of NIS 11 per kg is imposed on plastic utensils and NIS 3.3 per kg on disposable paper utensils that contain plastic.
Let's recall that on the day he took office about a week and a half ago, the Minister of Finance announced his first decision - the cancellation of the tax on disposables and the cancellation of the tax on sugary drinks.
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