Finance Minister Yuval Steinitz decided Sunday to reduce the purchase tax on
hybrid and electric vehicles, introducing it as part of the Tax Authority’s
“green taxation” policy
Purchase tax on electric vehicles will decrease
from 10 percent to 8% on June 1, before returning to 10% in 2014 and rising to
30% in 2015. Purchase tax on hybrid vehicles will remain at 30% in 2013 and
increase to 45% in 2014, instead of rising to 45% and 60%, respectively, as
originally planned
Steinitz introduced a separate purchase tax for
plug-in hybrid electric vehicles (PHEV), which will start at 20% before rising
to 30% in 2014, 45% in 2015, 60% in 2016 and full taxation in 2017. PHEVs share
the characteristics of both conventional hybrid vehicles, boasting an electric
motor and an internal combustion engine, and of an all-electric vehicle, with a
plug to connect to the electric grid
The Finance Ministry said in a
statement it hopes to strike a long-term balance in the way it taxes different
technologies, allocating tax credits to vehicles according to how much they
pollute. In the short term, the ministry said it was taking into consideration
the difficulties non-polluting vehicles face in penetrating the local
market
The Treasury said Sunday’s measure would cost it about NIS 130
million in revenues. Israel has one of the highest rates of purchase tax on
regular vehicles in the world – 83% plus VAT
A spokeswoman for Toyota
Israel, which first introduced hybrid vehicles to Israel with the Prius in 2004,
told The Jerusalem Post the company welcomed the decision to reduce taxation on
hybrid and plug-in vehicles. Toyota would introduce its first plug-in vehicle to
the Israeli market in the coming months, she said
Mayer, which imports
Honda Jazz hybrid electric vehicle, also said it welcomed the
decision
“Without a doubt, maintaining the current tax rate will cause
private and corporate customers to continue to purchase vehicles that save them
from purchasing gasoline and that reduce air pollution,” the company said in a
statement
A spokeswoman for Better Place Israel, which will soon launch
its Renault Fluence ZE electric vehicles for commercial use, declined to
comment.
|