Tax Driving Not Cars, Says Israel Think-Tank

September 27, 2018 Taxation in Israel

Car tax in IsraelTEL AVIV – One think tank is calling for Israel to make purchasing cars cheaper, while making driver much more expensive.

A think tank in Israel is calling for taxes to be dropped entirely from cars, fuel, and auto-parts, and shifted towards driving.

Manuel Trajtenberg, a researcher at the Technion’s Samuel Neaman Institute, has submitted his proposal to the Finance Ministry of Israel, claiming that his idea will help alleviate the country’s worsening traffic problems.

It has been estimated by the Bank of Israel that in 2016 the impact of traffic delays resulted in economic losses of ISK 35 billion.

However, the national treasure believes that the cost is only ISK 25 billion, while some academics think that is currently as high as ISK 522 billion, and will reach ISK 100 billion by 2040.

None of the estimates take into account the costs associated with emissions or infrastructure planning.

Manuel Trajtenberg wants to institute a tax which will be levied when a car is driven.

The tax would not have one set rate but would be variable based on the location of the driving, the number of passengers, and the time of day that the car was driven.

The rate would be the lowest when a driver takes passengers, and drives at off-peak times, in low-density areas.