Finance Minister Moshe Kahlon on Monday announced that Israel’s government will reduce customs and sales taxes on dozens of items, a move he said would save Israeli consumers more than 800 million shekels ($227 million) annually.
Under Kahlon’s plan, the prices of electrical appliances, clothing and textile items, perfumes, and even inflatable swimming pools will be drastically reduced. Sales taxes amounting to 245 million shekels ($69 million) would be cancelled, and customs duties totaling 555 million shekels ($157 million) would also be dropped, seemingly by January.
“We are removing customs and sales taxes with the aim of lowering prices in stores,” Kahlon said.
Kahlon said tax cuts on such a scale had not been implemented in Israel since the 1990s, and stressed that “in order to bring down prices, bold steps must be taken.” He said every Israeli would feel the reduction in prices.
The plan is set to go into effect as soon as Kahlon signs the necessary ministerial orders, as the tax cuts do not require the approval of the Israeli government or the Knesset Finance Committee.
Kahlon said that Prime Minister Benjamin Netanyahu has been briefed on the move. But the plan may prove to be only temporary, as it would need to be reassessed ahead of the formulation of the 2019 Israeli state budget to see whether it has indeed led to a reduction in consumer prices.