Low-Pollution Cars Clogging the Streets in Israel

July 25, 2016 Taxation in Israel

TEL AVIV – Israel now has the worst traffic in the OECD, thanks in part to a tax which has helped reduce the countries reliance on highly polluting cars.

According to new information released by the Organisation for Economic Cooperation and Development (OECD) over the weekend, taxes levied on cars sales in Israel have seen a dramatic shift in consumer preference towards low-pollution vehicles, but has also resulted in much greater traffic congestion.

In 2009 Israel implemented a policy of taxing car sales based on each car’s emissions levels of five different pollutants.

At the time of implementation the least polluting cars in Israel accounted for 19 percent of all sales in the country.

However, in 2014 the level of sales of the least-polluting cars had risen to 83 percent of all private sales nationwide.

While the reduction in the number of highly-polluting cars in Israel has been a positive for the environment, it was also noted by the OECD that the new car tax had the effect of lowering the overall tax burden on the purchase of most cars types, leading to an increase in sales.

The rise in overall levels of sales of cars has led to an increased level of congestion, as more cars are now on the roads.

Israel currently has the most congested roads of all countries of the OECD.

Photo By: poeloq