New Israel Vehicle Green Tax Stiffs Hybrids

A new Israeli government “green tax”, scheduled to come into effect next month on new imported cars, is being contested by car importers, and is apparently headed to the High Court of Justice, Israel’s Supreme Court.

The new tax ordinance, already signed by Finance Minister Yuval Steinitz, and on the desk of Transport Minister Israel Katz for his approval, is a take off on legislation being proposed by the US Administration, which is also advocating new laws to make non-fuel efficient vehicles more expensive, while giving tax rebates for hybrid models and ones running on alternative energy such as hydrogen and bio-fuels.

For US citizens, you can get a better estimate of green tax breaks by visiting a tax calculations site. You can find many of them online.

The new Israeli law will  increase the tax on the car’s landed value to 90%, up from the present 75%. A tax rebate of up to NS 15,000 (US$ 3,850) will be allowed, however, on cars that are fuel efficient; which includes the handfull of hybrid models presently sold in Israel (mostly the Toyota Prius and Honda’s Civic Hybrid and new Insight models), and other models that will be designed to require less fuel; as well as run on alternative fuels.

The current situation, as noted in Globes,  is almost contrary to our June 13 article, which noted that cars like hybrids would be “rewarded” by the government tax man; while gas burners, especially ones like 4 by 4s would wind up being penalized.

This is not the first time that the Israel Finance Ministry has looked for new ways to bring in increased revenues from the population’s increasing love for the automobile; which are now clogging Israeli motorways and have resulted in the death of more citizens than all the country’s wars to date.

Three large car importers: Peugeot-Citroen importer David Lubinksi Ltd., Renault and Nissan importer Carasso Motors Ltd., and BMW importer Kamor Motors Ltd. are petitioning the government to cancel the new tax increase, on the grounds that it is nothing less than government intervention in the free market of automobile purchase, and has little to do with preserving the environment; such as the new US auto and European greenhouse gas emissions standards.

Nothing was mentioned in the petition in regards to electric cars and other environmentally friendly modes of auto propulsion; most likely because  these have not yet become commercially feasible, and probably won’t be for several more years.

So according to the car importers, this new tax law is not even offering much benefit to purchasers of hybrid and other fuel efficient models since these cars are at least 20% more expensive than ordinary 100%  gasoline powered ones and even with the  “rebate”, the difference won’t wind up being that much.