The Israel Tax Authority is set to revise the green tax formula starting January 2027, adding new pollution parameters and reducing tax credits for plug-in hybrids, according to reports. The reform aims to balance existing tax benefits for leasing holders, but will push hybrid vehicles into higher pollution groups, significantly increasing purchase prices for consumers.
The Israel Tax Authority intends to revise the green tax formula starting January 2027, adding new pollution parameters and reducing tax credits for plug-in hybrid vehicles, according to a report. The reform aims to balance existing tax benefits for leasing holders but will push hybrid vehicles into higher pollution groups, significantly increasing purchase prices for consumers. The move comes amid a broader debate over Israel's cost of living and tax policy. In recent weeks, the Knesset has advanced bills to cut VAT, the Transport Ministry delayed fare hikes, and the IMF recommended raising VAT and freezing tax brackets — all developments covered by The Zioneer. The green tax reform specifically targets the automotive market, where hybrid vehicles have enjoyed significant tax breaks. The exact price impact has not been quantified, but the change is expected to affect a wide range of car models.
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