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Last update - 06:16 09/07/2009
'Drought tax' to start next week
By Avi Bar-Eli
Tags: Israel News, Tax, Water

The Drought Tax, a levy on excessive water use, was approved by the Knesset Finance Committee yesterday. The tax using water in excess of the allotted amount will come into force the day the Economic Arrangements Bill is approved, July 15-16.

Under the current draft, a family of four will be allotted 16 cubic meters of water until November 2009, and another 4.2 cubic meters for each additional person in the household. Starting in November and until the beginning of 2010, the amount of water exempt from the tax will increase to 18 cubic meters for a family of four, and 5 cubic meters for every additional household member.

In 2010, the Drought Tax exempted allotment will increase to 12 cubic meters for a family of two, and 15 cubic meters for a family of three, and 5 cubic meters of water for ever additional household member. Households will be charged NIS 20 for any amount used in excess of this allocation.
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The discount offered to residents in relatively hot and dry areas will be canceled, and replaced with a bigger personal allocation. In Eilat, for instance, residents are to be allocated 7.5 cubic meters per month per person, and residents of Tiberias and Beit She'an will be subject to Drought Tax on monthly consumption in excess of 5.2 cubic meters. Starting in 2010, this figure will increase to 6 cubic meters.

The tax was presented as part of the Water Authority policy to implement a billing model providing an incentive to economize on water and reduce surplus consumption. As of 2008, some 30% of all residential water consumption was subject to the highest rate, which applies to excessive consumption. The government believes excessive consumption could be cut by half by increasing this rate to reflect the cost of the country's water shortage, saving 60 million cubic meters of water annually.

Municipal water corporations are to receive a 13% handling fee for collection of the tax.

MK Uri Maklev (United Torah Judaism), who oversaw negotiations with the Finance Ministry and the Water Authority, said the bill in its original wording would have been a blow to those ill fit to bear it. The amended bill will result in water savings, but be bearable, he said.

"We have made far-reaching changes, and done everything that could be done to reduce the damage and suffering that would have hurt many sectors of society, while demonstrating responsibility in terms of the economic situation and the shortfall in state coffers, " said Finance Committee chairman Moshe Gafni (UTJ) yesterday, following approval of the bill.
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  1.   how much of this water... 14:00  |  ravi 09/07/09
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  5.   Taxes, taxes and more taxes 10:02  |  FOX 12/07/09
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