Prime Minister Benjamin Netanyahu and Minister of Finance Yisrael Katz have decided to abolish a series of duties and purchase taxes on certain products, at an annual budget cost of NIS 1.45 billion. In effect, the move anchors in legislation tax cuts made under previous finance minister Moshe Kahlon's "Family Net" program.
The Ministry of Finance said that abolition of the customs duties had already been priced into the budget deficit forecast , such that the deficit for 2020 (which is at a level not seen in decades) will not grow as a result of it. A spokesperson for the Ministry of Finance said, "As stated in the presentation to the government in the revision of the three-year budget plan, the working assumption of the Ministry of Finance, on the basis of which the tax revenues forecast was built, was that tax reductions approved in April and December 2017 would be extended."
The abolition of customs duties and purchase tax will apply to mobile telephones, clothing and footwear, baby products, electronic entertainment equipment (television, screens, loudspeakers and so on), domestic electrical products, toys and games, perfumes, and more.
The Ministry of Finance statement said, "The decision to abolish the taxes permanently was made after the prime minister and the minister of finance were presented with an effectiveness study that showed that the temporary abolition of the duties and purchase taxes led to a substantial, sustained fall in prices to the consumer of the products in question, including in comparison with other countries."
Published by Globes, Israel business news - en.globes.co.il - on June 8, 2020
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