A survey carried out recently for the Transportation Ministry and published last week showed that the number of vehicles in Israel, which stood at the end of 2004 at 2 millions, is set to rise by 25% to 2.25 million by the year 2010.
The survey also noted that the level of motorization in Israel is expected to increase from the present 296.7 vehicles per 1,000 citizens to 332 private vehicles per 1,000 citizens.
Compared with some European countries the level of motorization in Israel is rather low. The survey pointed out that if compared with some European countries whose gross domestic product is below that of Israel the motorization level legs behind.
In Cyprus for example, there are 408 vehicles per 1,000 citizens, in Portugal 378, in the Czech Republic 357 and in Greece 339. In terms of growth rate of number of vehicles the survey showed that in the 1980s the growth rate was 6.5% a year but slowed to 5.8% in the following decade and slumping to 2.7% by 2004.
Annual growth is expected to recover to 3.6% by 2010. The low rate of motorization was, according to the Transport Ministry, due to the very high purchase tax rate on private cars. Imported cars are levied with purchase tax of 95% and value added tax of 16.5%, while in Europe the average tax rate is 30%.