Jerusalem: Israeli Finance Minister Yair Lapid has signed a decree to raise the purchase tax on alcoholic drinks by 25 percent.

As of July 1, the purchase tax on alcoholic beverages would be USD 28.5 per liter of alcohol, instead of USD 23 per liter.

Lapid surprised alcohol consumers in the country by bringing the decree into effect five months earlier than expected. The government expects to gross in an estimated 200 million shekels (about USD 54 million) as a result of the hike.

According to the tax authority, the new measure is in line with the government's policy to tax goods with negative effects, such as beverages with high alcoholic volume and cigarettes.

The alcohol tax hike was first introduced in the 2013-14 austerity budget which the new Israeli government has drafted to cover its deficit that hit 42 billion shekels (USD 11 billion). The budget stipulates tax hikes and cuts in social services budget.


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