Peak hour drivers to pay higher tax

The Finance Ministry and Transport Ministry will publish a tender for smart meters to monitor road usage.

The Ministry of Finance and Ministry of Transport are to publish a tender for a smart meter, which may be installed in all vehicles in Israel. The purpose of the tender is to develop a monitor that can guarantee the user's privacy as far as driving habits are concerned.

The ministries are considering replacing the current tax system, which levies a uniform tax on new cars and on fuel, with differential taxation based on the driver's travel patterns.

For example, drivers who use their cars during peak hours in metropolitan Tel Aviv will be charged a higher amount of tax at the end of the month than drivers who use their cars during off-peak hours in the periphery. The new tax method is intended to reduce traffic congestion, save work hours, and reduce government spending on transportation projects.

A problem of privacy

A month ago, the Ministry of Finance and the Ministry of Transport initiated a pilot, Going Green, to test the new method. Several hundred participants, out of the 1,200 participants needed for the assessment, have already signed up. During the two-year pilot, each participant will receive up to NIS 25 for each trip not taken. Changing driving habits will enable the participants to save up to NIS 10,000 over 18 months. To test the change in driving habits, each car will have a meter installed to monitor driving patterns. There pilot's organizers will provide a contractual commitment that the data will not be transferred to third parties.

However, a transportation planning source admits that "without a full solution to the privacy problem, we cannot even think about implementing the new tax method." He added, "We want a system which will not notify Big Brother about where a vehicle is located, but in which the device will make the calculations, and allow the car owner to delete data after use."

The sources noted however that protecting the privacy of travel patterns was becoming irrelevant in view of the progress in web-based location systems and software such as Waze.

The tender for developing the system is in the preparation stage. Sources involved in preparing the tender predict that it will be published within two months, and that a prototype will be developed within a year. No decision has yet been made about the options for financing the product's development, or what rights the developers will have.

Registration for the pilot is at

Published by Globes [online], Israel business news - - on April 9, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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