Ministry of Finance Promotes: The Heavy Duty on Liquor

Following the plan to raise taxes on disposable dishes, Finance Minister Avigdor Lieberman plans to raise the purchase tax on sugary drinks. In the draft order that reached Walla! Money, it is written that this is a fixed tax that will be imposed on all sugary drinks in order to “reduce the excess morbidity caused by the consumption of high-sugar drinks.”

The amount of the tax will range from NIS 1.61 to NIS 2.89 per liter of sugary drink, excluding water, soda, milk, herbal milk substitutes, alcoholic beverages, and excluding hot beverages – coffee, tea and the like. When the guiding principle is that the more sugar the drink contains, the higher the tax rate.

For example, the price of a Coca-Cola bottle containing one and a half liters will increase according to the offer from NIS 6.5 to NIS 9.8 – a 51% increase in price.

Expected: The tax will significantly reduce usage

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The explanation from the Ministry of Finance states that “in recent years there has been an alarming trend of obesity among Israeli citizens – 48% of Israelis aged 20 and over are overweight, with an emphasis on vulnerable populations and especially at young ages.

Beyond the copy costs based on the health system as a result of this trend, obesity has serious health consequences: for example, grade 2 obesity increases 8.7 times the chance of developing diabetes, 5.7 times the chance of getting sleep apnea, and 4.1 times the chance of developing high blood pressure. ”

Soft drinks (Photo: Ingeimag)

It was also noted that 43% of children in Israel drink sugary drinks every day, which puts Israel in fourth place among OECD countries. In recent years, many countries have adopted a similar policy of taxing sugary drinks – including Finland, Denmark, Mexico, Hungary, France and more.

Studies that have examined the effectiveness of this taxation on citizens’ consumption habits have found that they can significantly reduce the consumption of sugary drinks, thus leading in the long run to a improvement in the health of the residents.

“Complementary moves must be promoted”

The Manufacturers’ Association stated: “The association understands the vitality of the program and does not oppose it, however, in order not to be a tax that will only burden the cost of living for the end consumer, moves accompanied by a program – such as practical recycling solutions, educational activities to increase waste awareness. “In parks and beaches; investing tax receipts in adapting local industry’s production lines to the changing world and developing more environmentally friendly products; differentiation in taxation by combining Israeli recycled materials; and the possibility of throwing disposable utensils in recycling bins.”

Sources involved in the details of the bill as well as in the production data in the field of soft drinks claim that the plan is full of holes, as its title is to reduce morbidity due to consumption of sugary drinks, but it also includes flavored water and sugar-reduced or even sugar-free drinks.

According to them, this figure proves that this is a kind of hidden tax and not one intended to “reduce morbidity” as written in the bill.

It should be noted that the sugary drinks constitute only 15% of the products rich in sugar, so the question arises as to why not tax the purchase tax similar to the other 85%. Yes keep in mind that in any case, educated products high amounts of fat, sodium or sugar, are already marked with a red label.

In any case, various factors in the soft drink industry feel that it would have been easy to mark the industry as a target, after the recycling law that enters into force in early 2022 will raise drinking prices anyway.

Other sources, other than soft drinks, say: “Since the finance minister declared no taxes and announced reforms to reduce the cost of living, we see a series of ‘small’ taxes – once the property tax, once the sugary drinks, once the disposable utensils. So maybe you Income tax and VAT do not go up, but all these small steps are meant to enrich the state coffers at the expense of the citizens. How does this fit in with the apparent desire to reduce the cost of living? “


Source: Maariv.co.il – כלכלה בארץ by www.maariv.co.il.

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