The Tax Authority received an order from Finance Minister Bezalel Smotrich to extend the cancellation of the exemption on sweet drinks, in a step contrary to the position of the professional echelon in the Ministry of Finance – both because it would reduce state tax revenues during emergencies and because of its implications for public health.
As you may recall, the tax on sugary drinks was introduced by the previous government (the government of change) at the beginning of 2022 in order to reduce the consumption of sugar and its substitutes and reduce its negative effects, including diabetes. Along with a tax on sugary drinks, an additional tax was imposed on disposable utensils. It should be noted that it is estimated that extending the tax exemption on sugary drinks will cost about NIS 700 million a year.
The ultra-Orthodox parties called these two taxes "Lieberman decrees," and saw them as a measure intended to harm the ultra-Orthodox public, which consumes a lot of sugary drinks and disposable utensils. One of the first steps taken by the current government was to abolish taxes on sugary drinks and disposable utensils, despite opposition from public health experts.
A decision that will harm state revenues and have implications for public health. Smotrich (archive), photo: Oren Ben Hakon
Now, the Tax Authority has been instructed to extend orders to cancel the tax on sugary drinks, which are supposed to expire at the end of the year. It should be noted that taxation on sweetened beverages is customary in many developed countries, and in Israel its imposition has reduced the consumption of sweetened beverages.
According to OECD data for 2019, the prevalence of overweight and obesity among Israeli children was about 38% among children aged 9-5, placing Israel in 8th place out of 35 OECD member countries. The data also show that about 60% of men and 55% of women from the adult population in Israel are overweight and obese. We also note that obesity is the most significant risk factor for diabetes, and it increases the chances of contracting this disease by 9 times.
The tax in Israel is NIS 1 per liter on beverages with more than 5 grams of sugar per liter (hereinafter, high-sugar drinks) and NIS 0.7 per liter on beverages with less sugar, artificial sweeteners ("diet") and natural juices (i.e., drinks with reduced sugar).
Bring about obesity that can lead to diabetes. Sugary drinks at the supermarket (illustration), photo: Getty Images
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