How the cancellation of the excise tax on soda affected the wallets of Israelis
Specialists from the Israel Tax Authority analyzed the economic consequences of canceling the excise tax on sweet carbonated drinks, which was in effect from the beginning of 2022 to spring 2023. As it turned out,…
Assessment
Israel's Tax Authority has found that removing the soda tax did not restore prices to pre-tax levels. Producers and retailers had raised prices beyond the tax's cost during its 2022-2023 period, and the reversal was incomplete. This suggests a market asymmetry where cost increases stick but decreases do not fully pass through to consumers. The key question is whether this pattern will repeat with other temporary levies.