After hedging, government says it will cancel entire tax hike on sugary drinks

Shas chief Deri welcomes move as fulfillment of election promise; measure, which was motivated by health concerns, has been slammed by ultra-Orthodox as targeting them

Plastic bags with bottles for recycling in Jerusalem, September 8, 2022. (Yonatan Sindel/Flash90)
Plastic bags with bottles for recycling in Jerusalem, September 8, 2022. (Yonatan Sindel/Flash90)

The government voted Sunday in favor of canceling a special tax on sweetened drinks that was introduced by the previous government as part of a drive to reduce the consumption of unhealthy beverages.

The tax had been criticized by the ultra-Orthodox, or Haredi, community as a deliberate move against it that needed to be repealed. The tax had been accompanied by another tax on single-use plastic utensils, aimed at preventing damage to the environment, which is also being canceled after the ultra-Orthodox railed against it as well.

The decision came after the Kan public broadcaster reported last week that leader of the ultra-Orthodox Shas party Aryeh Deri was considering asking the government to leave the tax in place for sugary drinks and only end it for diet and zero-sugar drinks. Deri reportedly received a letter from a women’s lobby group within his Shas party that argued sugary drinks are bad for the health of their families. The letter asked that the tax be left in place on sugary drinks.

That report was met, however, with angry reactions from Deri’s base, and he welcomed the cancellation Sunday, saying in a statement: “We promised to cancel this damaging tax, so it has been done.”

In his first act in office last month, Finance Minister Bezalel Smotrich — a Deri ally — instructed ministry officials to roll back tax hikes on single-use plasticware and sweetened drinks put in place by his predecessor, Avigdor Liberman.

Ultra-Orthodox Israelis perceived the tax hikes — aimed at preventing harm to health and to the environment — as targeting them in particular, due to their reliance on such products. The Haredi community includes prime consumers of soft drinks and also plasticware, which many, due to large families, prefer over washing the same number of dishes.

Earlier this month, leading health scholars wrote in the medical journal The Lancet that abolishing the tax on soft drinks was a “grievous blow to public health” and “seriously tarnishes Israel’s international standing.”

Deri was initially appointed health and interior minister when the government was established at the end of last year, but was reluctantly fired by Prime Minister Benjamin Netanyahu in January after the High Court of Justice ruled that he was not fit to serve as a minister due to his recent conviction for tax offenses.

Deri plans to return to his previous posts and the Ministerial Committee for Legislation on Sunday approved a bill that would end all court oversight on minister picks, as part of a wider legal shakeup that proponents say is needed to rein in an overreaching judiciary, but which critics warn will undermine Israel’s democratic foundations.

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