Finance Minister Yair Lapid raises taxes on alcohol, then claims it was because of a binding agreement with the OECD. Problem is, the OECD has no clue what he’s talking about.
After only a few months in office, local news and social media arenas seem to be catching Finance Minister Yair Lapid with a new faux pas almost daily. Be it wrong economic figures, misunderstandings, misquotes or others – Lapid just can’t seem to keep up the appearance of someone who actually knows what he’s doing.
But if until now his unfortunate mishaps were limited to the scrutiny of domestic critics, today he opened an overseas front. Calcalist, Israel’s largest financial daily, published a story [Heb] Monday concerning Lapid’s decision to raise taxes on alcohol. The move was greeted with an uproar in Israel because it almost doubled the price of cheap liquors consumed by the lower and middle classes (such as arak) and brought down taxes on beverages enjoyed by the wealthy, such as cognac. In early July, Lapid said that the decision to raise the tax was not his doing:
This is an agreement that previous Finance Minister Yuval Steinitz made with the OECD, and these agreements must be enacted.
Calcalist turned to the OECD, and this is the response they got:
We do not force, and we even do not recommend, any rule or policy in this area. There are no tolls that are legally binding, and not even recommendations, concerning alcohol taxation specifically or consumer taxes of any sort.