It will cost a bit more to say ‘l’chaim’ beginning on July 1, 2013, when the government tax increase on alcohol takes effect. The tax on beer has almost doubled, along with an increase in cigarette tax and a 1% hike in the value added tax. Tax on all alcoholic beverages will increase 25% after Finance Minister Yair Lapid signed the order.
At present, the tax per liter of alcohol is 84 NIS, but it is increasing to 104 NIS. The price refers to 100% pure alcohol. Therefore, the higher the alcohol content in a bottle of whiskey, the higher the tax. For example, beer containing 5% alcohol will be taxed 5.25 NIS per liter as opposed to 4.19 NIS today.
When one looks at whiskey the situation becomes a bit more painful for those seeking to imbibe. Officials in the treasury explain this is in line with Lapid’s hashkafa, to impose higher taxes on items that cause more damage, such as whiskey and cigarettes.
The alcohol industry in Israel is reported to be 5 billion NIS annually, bringing in 250 million NIS into state coffers by the end of 2013. Estimates show the state’s income in 2014 will climb to 450 million NIS.
Folks in the industry explain the higher priced items, name brands, will drop in price while the cheaper whiskies will increase significantly in price as a result of the new policy. State officials hope this will encourage shoppers to make purchases in regular stores instead of duty free.
(YWN – Israel Desk, Jerusalem)