JERUSALEM, March 8 (Xinhua) -- Israel will impose a travel tax on electric vehicles (EVs) and plug-in hybrid EVs, the Finance Ministry and the Israel Tax Authority (ITA) announced in a joint statement on Friday.
The new tax, scheduled to take effect in 2026, aims to address road congestion and promote the use of public transportation, the statement said.
Beyond addressing transportation needs, the travel tax is a key government measure to tackle the state budget deficit, exacerbated by the ongoing Israel-Hamas conflict, it added.
The ministry emphasized that imposing the tax is crucial, given Israel's credit rating downgrade, highlighting the importance of actions that enhance the country's credibility and financial stability and contribute to reducing the debt-to-GDP ratio.
The new tax rate will be 15 shekels (4.20 U.S. dollars) for every 100 km traveled by electric and plug-in vehicles, which is lower than the average excise tax paid by gasoline and diesel vehicle owners.
The statement explained that the lower tax rate reflects the relative advantages of EVs, such as reduced air pollution, greenhouse gas emissions, and noise.
Besides the travel tax, the ministry and the ITA are promoting a graduated outline for reduced purchase tax rates for EVs for 2025-2027. ■
