New fines for drivers and VAT reform – what Israelis should expect

Israeli experts are skeptical about the Finance Ministry's plans to implement 'instant VAT' from January 2027 due to the need for legislative approval in the Knesset during the pre-election period. Meanwhile, the traffic police have reduced the tolerance for speed cameras on some sections without disclosing their list, which has been criticized as a 'trap' for drivers.

The Israeli media space is discussing two initiatives: tax reform and changes in the work of the traffic police. The director of the tax authority, Shai Aronovich, announced the transition to 'instant VAT' through the digital platform 'Hashbonit Israel', where the tax will be transferred at the moment of payment, not once a month. The goal is to close fraud channels through which the budget loses about 15 billion shekels annually. However, experts doubt the realism of the timeline from January 1, 2027, as it requires a full legislative procedure, including three readings in the Knesset, and the parliament is in a pre-election cycle. The reform may be included in the Law on State Regulation for 2027 due to defense spending. In parallel, the traffic police have reduced the tolerance for A3 speed cameras on some sections without disclosing their list. The police explain this as a fight against accidents, but critics see an attempt to increase revenue, pointing to the real causes of accidents – phones and drunk driving. The opacity of the innovation creates a 'trap' for drivers; experts suggest revising speed limits, as in Abu Dhabi.