Car Importers Try to Beat Tax Hike, But Will Pass It On to Consumers

Cars in the port of Eilat. (Matanya Tausig /Flash90)

Some 60,000 vehicles are set to be released from customs in the coming weeks – a record amount for a single month – as car dealers seek to beat an April 1 deadline that will see taxes on certain models, especially small cars, jump significantly. The vehicles will not be going directly to consumers, but to dealers – who plan to hold onto them and sell them after April 1, keeping the additional costs that are supposed to be for the increased purchase taxes for themselves, Globes reported.

The tax increase will affect vehicles that emit higher than permitted levels of carbon dioxide. Affected will be many smaller models, especially Korean-made vehicles – currently among the most popular in Israel. It is not yet clear exactly how much taxes will be going up.

In order to beat the price increase on popular vehicles, dealers have ordered tens of thousands of them, which they will sell at the higher price that will include the tax increase – even though the taxes will have been paid at the lower rate. According to the Calcalist report, so many dealers have ordered large numbers of vehicles that they have contacted large shipping companies, asking them to change their routes to accommodate the increased shipments of vehicles to Israel.

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