The Knesset Finance Committee approved the green tax system for automobiles on Wednesday after sending an earlier proposal back for revisions. The green tax system revamps the current tax on cars and restructures it to give discounts based on the pollution level of the car. Cars that pollute less will be taxed less than cars with higher emissions levels like SUVs.
Finance Committee Chairman Moshe Gafni (UTJ) had sent the previous proposal back to the Tax Authority with a request to reduce the increase in the base tax on cars from 90 percent to 83%. At present, new cars have a base tax of 75%. The green tax system will go into effect January 1 and will only apply to new cars bought on or after that date, and not retroactively to cars already on the road.
Gafni also ordered a review of the system in nine months to see if it needed to be adjusted in any way.