Social-economic cabinet approves company car tax reform

The use value of company cars will be doubled over three years.

The social-economic cabinet, headed by Minister of Finance Abraham Hirchson, yesterday approved the Ministry of Finance proposal to raise the use value of company cars over three years. This was the final approval to the cabinet approval of the ministry’s proposal two weeks ago.

Only three ministers attended the social-economic cabinet’s discussion and listened to a Ministry of Finance official’s presentation. The official said this was an essential part of the ministry’s general tax cutting plan, which was intended to create a fairer and more just distribution of resouces.

Minister of Housing and Construction Meir Sheetrit said that Ministry of Finance had adopted a moderate line as far as use value of company cars was concerned. He said that the reform would have a positive effect on transportation. He favored the measure when he held the transport portfolio.

The measure will now go to the Knesset Finance Committee, which will reportedly discuss it in late March. The Ministry of Finance plans to send its entire tax reform to the Finance Committee as a single package, and not separate out the company car use value.

The Ministry of Finance plans to double the use value of company cars over three years, while cutting income taxes.

Published by Globes [online], Israel business news - www.globes.co.il - on February 19, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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