Expensive habit (illustration)
צילום: רויטרס
New tax imposed on cigarettes
Finance Minister Steinitz signs off on Customs and Sales Tax amendment effectively raising tobacco product prices by NIS 2 per pack. New tax to result in approximately NIS 700 million in State revenues
Finance Minister Yuval Steinitz signed an amendment to the Customs and Sales Tax Tuesday, effectively raising the sales tax on cigarettes from NIS 0.99 to NIS 1.25 ($23 cents to $29 cents).
The overall tax on tobacco products' sales now stands on 63% of a packet's price – an increase of about NIS 2 ($47 cents) per pack.
The new ordinance also calls for a 10% tax on cigarettes inventories held by businesses, but no minimal price has been set for a pack of cigarettes, meaning the overall increase as far as the consumer is concerned, depend on the tobacco brand.
The new tax is expected to bring some NIS 700 million (approximately $167.16 million) into the Treasury's fund.
Although the ordinance took effect immediately, it still need the retroactive approval of the Knesset's Finance Committee.
The committee stands to green-light the new tax, as is the Knesset plenum, which is said to vote on it within two weeks.
Sources in the state service told Ynet that the new tax was meant to be included in the arrangements bill, which is a traditional appendix to the government budget bill, but once details of the new ordinance reached the media on Wednesday, the Treasury decided to impose it immediately.
Nevertheless, the Israel Tax Authority said the new tax will make no more than "a technical difference" to the existing one, and that the end consumer will not be affected as much.
