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Finance Minister announces exemptions on import taxes for range of items including cosmetics, electric appliances, clothing, and shoes.
Moshe Kahlon at a press conference Flash 90
Finance Minister Moshe Kahlon (Kulanu) at a Monday press conference announced that he would slash taxes by 800 million NIS ($227 million) in what he doubled the "Neto Hozalot" [Net Reductions] plan.
Alongside Kahlon at the press conference were Deputy Finance Minister Yitzhak Cohen (Shas), Finance Ministry Director General Shai Babad, Tax Authority Head Moshe Asher, Finance Ministry Chief Economist Yoel Naveh, and Budget Director Shaul Meridor.
Under Kahlon's "Neto Hozalot" plan, the Finance Ministry will reduce import taxes on a wide variety of consumer goods. Basic items sch as electric appliances, cosmetics, clothing, shoes, and various other items will exempted from import taxes.
Kahlon explained that the ministry had come under heavy pressure from Israeli businesses to place restrictions on foreign internet-based stores, including demands that the $75 Value Added Tax exemption, which allows Israeli consumers to import up to $75 worth of goods without paying either the VAT or import tax, be revoked.
Instead, Kahlon continued, the Finance Ministry had decided to use the government's budget surplus to bolster Israeli retailers by exempting a wide range of consumer goods from import tax, making Israeli stores more competitive with internet-based retailers like Amazon.com and AliExpress.
Other parts of Kahlon's plan include a middle class income tax break, cutting the marginal income tax rate for those earning over 11,000 NIS ($3,130) per month; offering companies and small businesses tax breaks; and other tax cuts. This plan is expected to be implemented in January 2018, and will be paid for using the government's current revenue surplus. However, the plan still needs to be approved by both Israeli Prime Minister Binyamin Netanyahu and the Knesset.