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The Treasury wants their owners to pay 15 ezots per km as travel tax (Photo: Yehtz)
The Ministry of Finance is launching a campaign in preparation for the attempt to approve in the Knesset the passenger tax on electric vehicles, which will charge tram drivers 15 cents per kilometer traveled, and will be calculated at the time of the annual test. Such a proposal was included in the draft of the Arrangements Law, but it is not certain that the government will support such an unpopular move: The Economic Adviser The Prime Minister, Avi Simhon, has already expressed opposition to the idea. Benjamin Netanyahu's own position is unclear.
A report published this morning by the Ministry of Finance acknowledges the advantages of electric vehicles, such as reducing pollutant emissions and noise, and the cost of travel is 75-80 percent cheaper than gasoline vehicles. But in the Ministry, As in the Treasury, they look at the empty glass, expressing concern that thanks to the low costs electric cars will travel more, and will only increase the gap by not paying taxes in their favor. The Treasury estimates that electric car drivers will travel 15% more than others thanks to the low costs.
The Treasury notes that electric vehicles are entering Israel at a faster rate than expected: in 2022, the proportion of electrified, electric and plug-in vehicles out of all imported vehicles was 19.7%.
This may be good for the environment, but bad for the wallet, because electric vehicles receive significant tax benefits today through discounts on the purchase tax and the annual license fee.
In addition, they do not pay excise tax in light of the fact that they do not consume gasoline or diesel.
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Sales of electrified vehicles (electric + plug-in) in the world in 2022 (Photo: Ministry of Finance)
According to the Ministry of Finance in 2021, the last year for which data is available, the average purchase tax on a vehicle in Israel was NIS 41,000, compared to only NIS 18,000 for an electric vehicle.
Since then the tax rate has been doubled from 10 to 20 percent, so that today it is already significantly higher, and next year it will rise again to 35%.
An electric vehicle is charged a license fee of NIS 550 (including the broadcasting corporation fee), sometimes one-third to one-sixth of what a gasoline vehicle pays for the same price.
According to the Ministry of Finance, in an international comparison, the scope of benefits for an electric vehicle in Israel throughout the life of the vehicle is currently significantly higher than the average in the European Union.
On the other hand, the Treasury ignores a tax credit in the basket of $7,500 that every US resident who buys an electric car manufactured in North America receives.
The Treasury also claims that the benefit of an electric car is worth 6.2 NIS per 100 km of travel.
On the other hand, the external costs it generates, in the use of roads, parking and energy to produce electricity for it in the power plants that pollute most - although less than that of gasoline engines - are worth NIS 6.55 per 100 km.
The report only confirms what we have already proposed in Vala: a travel tax will arrive, if not in 2026 as the Treasury is currently requesting, then later. If you plan to change your car soon and have a parking lot where you can charge it regularly and not be dependent on the network of public charging stations The missing one, which is not always available and is more expensive than charging at home, is the time to buy a tram and enjoy the low usage costs for as long as possible until the travel tax is applied. Although at the current rates driving the tram will be cheaper even afterwards, but the gap will be smaller: instead of saving approx. NIS 1,000 a month today for those who travel about 20,000 km a year and charge mainly with home charging, the savings will drop to NIS 750 a month.
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