A study by "Globes" has found that organized imports of diesel cars could end in the second half of 2013 because of the sharp rise in prices as a result of the green tax update. Under the updated green tax formula, which the Israel Tax Authority published earlier this week and which will come into effect on August 1, most diesel cars are liable to be reclassified from the 4th and 5th groups to the 12th and 13th groups.
This means a lower tax credit of NIS 8,000-10,000 on some popular models, which will raise their prices by the same amount. Such models include the Renault Fluence Turbo Diesel, the Opel Astra Turbo Diesel, and various vehicles made by Skoda and Volkswagen. Industry sources believe that the higher prices could result in large artificial differences between diesel and gasoline models and offset the savings in fuel consumption of diesel cars. Imports of diesel cars will therefore most likely continue mainly for the taxi cab market.
In the hearing which preceded the green tax update, several importers appealed against the severe and disproportionate blow to diesel cars, which they said were especially economical. However, the Tax Authority rejected the appeal, saying, "The issue of fuel consumption has greater weight both under the current formula through the high weight in the average green score and the updated formula. There are already diesel cars in the world which achieve low pollution levels under the new formula."
Several car importers said that, in the past few days, there had been a jump in orders for diesel cars, which will be delivered before the green tax update comes into effect. They added that they expected demand to grow.
Published by Globes [online], Israel business news - www.globes-online.com - on June 6, 2013
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