Taxes Lowering Alcohol, Tobacco Consumption


Israelis are smoking and drinking less, due to higher taxes on alcohol and tobacco, according to a survey two months after the tax reforms took effect, Globes reported on Wednesday.

The survey, by C.A. Marketing Information Institute headed by Noam Raz and Meirav Schapira, found that 44% of those who drink alcohol have reduced their consumption, while 60% of smokers have reduced the number of cigarettes that they smoke.

Price changes were significant. A bottle of arak rose from NIS 84 to NIS 105. The new tax was levied according to price and the level of alcohol in the drinks. Cheap spirits like arak that have high alcohol content were particularly affected.

The tax on cigarettes went up by 18%, causing the minimum price for a pack of cigarettes to be NIS 12.

As a result of the higher taxes, the monthly expenditure by alcoholic beverage consumersby fell by an average of NIS 30 and stood at NIS 130. The number of people who abstain from alcohol has risen from 17% before the reform to 29%.

Some 5% of Israel’s adult Jewish population say they have stopped smoking since the new tax, and 33% say they have significantly decreased their smoking.