The Knesset’s Finance Committee today (Wednesday) approved the orders signed by the Minister of Finance, Avigdor Lieberman, according to which taxation will be imposed on fuel substitutes and lubricating oils. The orders will take effect on January 17 and from that date a tax of NIS 3,978 per tonne will be applied to fuel substitutes and solvents and NIS 2,983 per thousand liters to lubricating oils. In this way, the tax on these materials will be compared to the tax imposed on fuels.
The purpose of the move, formulated by the Tax Authority together with the Ministry of Energy and the Ministry of Environmental Protection and in coordination with the Ministry of Economy, is to prevent the use of these materials to produce cheap fuel substitutes for machines, cars and heating. The use of these substitutes deducts an estimated NIS 1 billion a year from the state coffers, due to the reduction in the use of gasoline and diesel. Also, the use of cheap substitutes is more harmful to the air quality, causes defects in the machines it fuels and may even result in injury to human life from a machine explosion or fire.
In light of the fact that these materials are also used as raw material for the production of products such as adhesives and oils, and have even been used to lubricate vehicles in garages and various industries, it was decided to grant tax exemption to manufacturers from a variety of industries and suppliers selling these materials. In addition, it was decided to exempt from tax engine oils that meet a number of pre-determined parameters, such as viscosity level, flash point and more. All this, in order to minimize the harm to industries and crafts that use these materials not to produce energy.