More challenges arise for Israel’s tax on disposable utensils

Almost a month after a new tax on disposable plastic utensils took effect, the Finance Committee is now taking a closer look at the policy.

On November 1, Israel began taxing the sales of disposable plastic utensils, including glasses, plates, bowls, silverware and straws at a rate of NIS 11 per kilogram. However, lawmakers say Finance Minister Avigdor Liberman pushed the tax in too quickly to allow enough opportunities to debate the change.

The new tax, which roughly doubles the price of many items, aims to reduce the use of disposable plastics, which are harmful to the environment. Under the law, manufacturers are responsible for paying the tax to the state and, in turn, pass the higher costs on to stores and ultimately to the consumer.

Israelis are known to be some of the largest consumers of disposable plastics in the world. They throw away around 70,000 tons of plastics each year and spend NIS 2 billion on such items, according to the Ministry of Environmental Protection.

Stores report that sales of such products have fallen by as much as 50% in the first month.

View of empty plastic bottles on the Dead Sea beach, November 5, 2020 (credit: YONATAN SINDEL / FLASH90)

However, numerous problems have arisen. Manufacturers have requested longer payment terms to pay taxes as they adjust to the new requirements. Others are outraged by the seemingly arbitrary way the tax is applied to products of different levels of thickness or plastic coating.

Haredi politicians have also attacked the measure for discriminating against them, as the ultra-Orthodox community uses plastic items at a higher rate than the rest of society.

At a Finance Committee meeting on Wednesday, manufacturer Amos Shaked noted that paper cups produced by his factory are taxed because they have a plastic content of 5%. This should be taken into account when calculating the tax, he said.

A tax on these paper cups hurts restaurants, said Tomer Moore, CEO of Strong Restaurateurs Together, an organization that represents the industry.

“This law is going to be a direct hit to our pocket,” he said. “We seek to exclude paper cups from this law, or at least reduce taxes on them to a minimum. Take out food is a major source of income for small venues. On average, there are a million consumers a day who buy coffee to go in paper cups that are 100% biodegradable, with 5% plastic. This hurts our pockets directly. “

The tax would increase the cost of a cup of coffee by about 8% for restaurants and cafes, Moore concluded.

MK Uri Maklev added that manufacturers now have an incentive to use thinner plastics instead of thicker ones, which will now cost significantly more.

Shaked also said that trucks with disposable goods from the Palestinian Authority, where the tax has not been imposed, have started arriving more frequently in the past month, allowing vendors to bypass the tax.

The committee chair, MK Alex Kushnir, concluded the meeting with a request to investigate these issues before the next meeting.

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