Tax Authority Official Sparks Debate Over Proposed Flight Tax
Translated & summarized from Globes by baba
Nili Ben-Tovim, a senior official at the Israel Tax Authority, defended a proposed tax on flights, sparking widespread debate online. The proposed tax, intended to address environmental and noise pollution, could add up to NIS 100,000 per flight, translating to an estimated NIS 12-274 per passenger. Critics argued the tax would harm the economy and tourism, while Ben-Tovim explained it addresses un-taxed environmental externalities. She also shared data indicating the tax burden falls heavily on the wealthiest Israelis, prompting further discussion on retaining high earners.
The story in 6 lines · by baba
- Israel Tax Authority official Nili Ben-Tovim defended a proposed tax on flights, calling it logical due to low existing taxes.
- The proposed tax could range from NIS 1,300 to NIS 100,000 per flight, adding an estimated NIS 12-274 per passenger.
- Critics argue the flight tax would harm Israel's economy, tourism, and export industries.
- Ben-Tovim stated the tax aims to address environmental impacts like global warming and noise pollution.
- She also noted that 80% of the tax burden would fall on the top two income deciles.
- The official's direct engagement on social media was noted and appreciated by some users.
Nili Ben-Tovim, Manager of the Research and Policy Department at the Israel Tax Authority, ignited a firestorm on social media platform X (formerly Twitter) after defending a proposed tax on flights departing from Israel. She argued that flights are "logical" to tax as they are "almost untaxed," citing the absence of VAT and fuel excise taxes. Her comment came in response to journalist Haim Levinson, who criticized the Tax Authority's initiative to impose a tax of up to NIS 100,000 per departing aircraft.
Ben-Tovim's post garnered significant attention, with hundreds of thousands of views and thousands of interactions. The Tax Authority's proposal, intended for the 2027 budget law, suggests a tiered tax ranging from approximately NIS 1,300 for flights by smaller planes to NIS 100,000 for larger aircraft on long-haul routes. The authority estimates this would add about NIS 12 per passenger on domestic flights, NIS 58 on medium-haul flights (primarily to Europe), and NIS 274 on long-haul flights. The proposed tax is expected to represent about 4-5% of the ticket price for consumers.
Critics, including Levinson, argued the proposal was "absurd" and would harm the economy. Dan Aridor, a former economic advisor, warned that such a tax would negatively impact Israel's high-tech and export industries, which rely on affordable travel. Other users sarcastically suggested taxing other untaxed resources like sunlight or criticized the lack of consideration for macro-economic impacts on tourism and the aviation sector, especially given that many low-cost carriers already avoid flying to Israel.
Ben-Tovim defended the proposal, explaining that the tax aims to address the environmental impact of flights, specifically their contribution to global warming and local pollution, as well as noise pollution. She noted that Israel invests resources in mitigating climate change and dealing with its effects, and that these external costs are not currently reflected in the tax system. She also highlighted that 80% of the tax burden falls on the top two income deciles, a point she later elaborated on in a separate post that also generated considerable discussion.
In her follow-up post, Ben-Tovim shared data showing that the top decile earns 45% of all income in Israel and pays 63% of taxes. This sparked a debate about retaining high earners in Israel, with some users, like "The Solida" economic page, questioning what Israel does to encourage these individuals to continue paying taxes locally. Ben-Tovim acknowledged concerns about emigration among high earners, noting an increase in such departures in recent years. The direct engagement from a public sector official was appreciated by some users for its transparency and willingness to explain complex issues.
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