Israel's Treasury mulls hiking excise on gasoline

Gasoline Photo: Shutterstock

The steep fall in oil prices will lower gasoline prices by up to NIS 0.90 in April, if there are no tax hikes.

The Ministry of Finance is considering a temporary increase in the excise tax on gasoline, sources inform "Globes." The measure is part of the efforts to reduce the anticipated steep drop in state revenues as a result of the coronavirus crisis.

The initiative comes at a time when fuel prices are expected to drop steeply next month. The idea is to raise the excise tax on fuel in order to reduce this decrease, or even eliminate it entirely. The partial shutdown of the economy and the closure are also greatly cutting down the use of cars by the public, which is likely to soften the blow from the new measure.

No dramatic increase in revenue is expected from the new measure. Revenues from fuel taxes total NIS 20 billion in an ordinary year.

The Ministry of Finance is feverishly looking for ways to increase tax revenues, given the very gloomy forecasts for state revenues as a result of the crisis. Raising excise taxes is a fairly simple step that does not require Knesset approval; all that is needed is the minister of finance's signature on an order to raise the excise tax.

The state currently charges NIS 3.07 per liter of gasoline in excise tax, and NIS 0.86 more per liter in VAT.

The precipitous drop in oil prices should lead to a steep fall in gasoline prices. It is believed that the price of gasoline will fall by NIS 0.80-0.90 per liter at the end of the month. The price of Brent crude oil recently fell to less than $30 a barrel.

The Ministry of Finance said in response, "No discussion of the matter is taking place."

Published by Globes, Israel business news - en.globes.co.il - on March 24, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Gasoline Photo: Shutterstock
Gasoline Photo: Shutterstock
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