BREAKING NEWS

Steinitz imposes 'sin tax' on beer, tobacco

By JPOST.COM STAFF

JULY 25, 2012 22:50

Finance Minister Yuval Steinitz signed an order Wednesday evening upping taxes on cigars, cigarettes and beer.

The order, which will go into effect at midnight, lobbed a 10 percent tax on retailer's existing inventory of tobacco products and increased the sales tax on future purchases from 260.6 percent to 278.6%, adding an estimated NIS 2-3 to the price of each pack. The price of beer also increased as the tax rose from NIS 2.18 to NIS 4.19.

The Finance Ministry estimates the taxes will net the state some NIS 1 billion.

So-called "sin taxes" are popular policy tools, as they both increase government revenues and deter "bad" behaviors, such as drinking and smoking.

Steinitz also agreed with Prime Minister Binyamin Netanyahu that on Monday, the cabinet will vote on tax changes for Israel's largest companies, including both specific increases and breaks.

The state expects to net some NIS 100 billion from the deal.

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