Finance Minister Plans Fuel Tax Cut Amid Election Period

Finance Minister Bezalel Smotrich has ordered the advancement of an order to reduce excise tax on fuel, aiming to soften an anticipated price increase for gasoline. The proposal under consideration would lower the consumer price by approximately half a shekel per liter, costing the state treasury around 300 million shekels in one month. Professional staff within the Finance Ministry oppose the move, citing potential significant revenue loss.

This initiative comes just hours after the Ministry of Energy announced that the maximum price for a liter of 95-octane self-service gasoline would rise by 16 agorot to 8.25 shekels, matching a September 2012 record. Part of this increase stems from an upward adjustment of the excise tax component itself, contributing 5 agorot to the liter's price hike due to a periodic index update by the Tax Authority.

Professionals in the Finance Ministry are reportedly against the initiative, estimating that every 10 agorot reduction in the price per liter translates to a monthly revenue loss of about 30 million shekels for the state. In addition to the budgetary challenge, a legal hurdle is being examined: whether the Attorney General will approve the tax reduction during an election period or deem it an election tactic.

Smotrich's office confirmed the report, stating the minister "ordered to advance a reduction in excise tax on fuel, in order to prevent the expected price increase resulting from the global energy crisis and ongoing tensions in Iran." The office added that professional discussions are underway within the ministry to determine the extent of the reduction and its implementation mechanism, with the minister intending to sign the order soon for the discount to take effect in the coming days.