(Illustration)
Photo: Tom Lahat
Boutique breweries find unlikely ally
Interior Minister Eli Yishai appeals to Finance Minister Yuval Steinitz against planned increase in beer sales tax; says move will spell local industry's demise
Interior Minister Eli Yishai made an unusual appeal to Finance Minister Yuval Steinitz this week, asking him not to impose the new alcohol sales tax on boutique beer breweries.
Boutique brewery owners have warned that the impeding tax hike will pose a detrimental blow to the industry, which is already struggling to keep up with the giant labels sold in Israel.
Tax Hike
Avital Lahav
Hike on cigarettes, cigar and beer taxes expected to generate some NIS 1 billion for the state's coffers. The new rates take effect immediately, and will be brought before the Knesset Finance Committee for ratification within two months
In a letter to Steinitz, Yishai wrote that the tax hike "equals a death sentence for the local breweries and may result in the firing of dozens of people, not to mention bring about the end of a fledgling, quality industry.
"We must remember that this is a difficult market, which is dominated by big, international companies," the letter said, adding that the latter control 98% of the market.
Yishai added that the State stands to make only NIS 3.5 million (roughly $880,000) a year from the tax hike, which he defined as "a negligible amount."
"Israel must promote and encourage any promising local industry and provide it with the tools to play on the same field as the various giants. I implore you not to increase the taxes imposed on boutique breweries," Yishai wrote.
