In a surprise announcement, Finance Minister Moshe Kahlon on Tuesday ordered the repeal of a 2013 tax hike on alcohol instituted by the previous government.
The tax on beer will be reduced by 46 percent, from NIS 4.33 per liter to 2.33 per liter. The tax on spirits will be reduced by 21 percent, from NIS 106.9 per liter of pure alcohol to NIS 85.
According to the Finance Ministry the 2013 tax hike levied in an effort to reign in a large state deficit, did not yield a significant increase in revenue, the financial news website Calcalsit reported.
A joint committee from the Treasury and tax authority officials recommended that Kahlon repeal the tax hikes after looking into alcohol prices in other OECD countries. The committee also noted that the higher prices did not have any effect on dangerous drinking habits.
With a NIS 106.9 tax per liter of pure alcohol, Israel’s tax on alcohol is among the highest in the developed world. In comparison, the US levies an equivalent NIS 35.10 on pure alcohol, Germany 58.50, and France 69.80.
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