In his first act in office, Finance Minister Bezalel Smotrich instructed ministry officials Sunday to roll back tax hikes on single-use plasticware and sweetened drinks put in place by his predecessor, Avigdor Liberman.
At his first work meeting as finance minister, Smotrich instructed officials “to prepare orders as quickly as possible in the coming days to cancel the single-use plasticware tax and the sugary drink tax that were imposed by the outgoing government,” the Finance Ministry said in a statement.
Smotrich told officials at the start of the meeting that he had “great faith in them and their staff.”
“There will be an open and deep dialogue between us, and professional decisions will be made to boost Israel’s economy for the benefit of all Israeli citizens,” he said, according to reports in multiple Hebrew media outlets.
Ultra-Orthodox Israelis perceived the tax hikes — aimed at preventing harm to health and to the environment — as targeting them in particular, due to their reliance on such products.
Haredi lawmakers commended Smotrich’s move, after repeatedly railing against the taxes and demanding in coalition negotiations that the government undo them.
According to the Israel Tax Authority, the removal of the charges will cause an annual loss of NIS 1.2 billion ($340 million) in tax earnings for the treasury.
United Torah Judaism MK Moshe Gafni praised the decision to reverse “the Liberman tax.”
“This was one of our promises to do immediately with the establishment of the government, and I am very pleased about it,” he said.
UTJ MK Uri Maklev said that once the tax is canceled, “we will act in public campaigns and in education to protect the environment and consume healthy drinks.”
The decision was panned, however, by former environmental protection minister Tamar Zandberg, who accused the government of “allowing petty politics to destroy the environment and health.”
“Instead of moving forward, this decision sends us back lightyears,” Zandberg said, adding that the decision would “only contribute to pollution and disease.”
The Israel Union for Environmental Defense also charged that the decision “harms public health, and even more so, decrees that the State of Israel will become one big landfill.”
The Israeli Association of Public Health Physicians called the rollback “unfortunate and blind” and said that despite claims the tax targeted the ultra-Orthodox, “data from the finance and health ministries indicate that the tax led to a decrease in consumption [of sweetened drinks] for the benefit of Israelis, including the ultra-Orthodox population.”
Prof. Nadav Davidovitch, head of health policy at the Taub Center for Social Policy Studies, told the Kan public broadcaster: “This is not a Liberman tax and it is not anti-Haredi, this is pro-Haredi. It’s a shame that politicians are playing a cynical game with people’s lives.”
Outgoing ministers held handover ceremonies Sunday with their successors in Prime Minister Benjamin Netanyahu’s newly sworn-in government.
During his meeting with Smotrich, Liberman cautioned that the role of the Finance Ministry was not only to “guard the coffers” but to generate revenue to create a runway that will enable acting more freely in making budgetary decisions.
Liberman appeared to refer to coalition deals signed by the incoming government that are slated to increase welfare payouts for the ultra-Orthodox, whose employment rate is low.
Smotrich pledged to largely continue the free-market policies undertaken by his predecessor, and to “increase competition as much as possible.”
“I’m not sure that all of our steps will be popular, but hopefully they will prove correct over time,” he said.
Smotrich is taking over from Liberman with Israel’s economy set to slow down significantly this year and the cost of living on the rise, led by housing and energy prices. Prices for a range of essential services and products went up at midnight, saddling consumers with big rises in the cost of gasoline, water, and electricity, as well as other items.