Customs Duties to Be Scrapped on 700 Imported Items

List of items to be exempted from customs duties is still being finalized at the Tax Authority, but will probably hardly be changed by Finance Minister Yuval Steinitz.

Barring a last-minute hitch, import duties will be scrapped altogether next week on about 700 items for which there are no domestically produced counterparts. The loss to the treasury from the customs duties collected on these products has been estimated at NIS 440 million a year, but the move should put an equivalent sum into the pockets of Israeli consumers.

The list of items to be exempted from customs duties is still being finalized at the Tax Authority, but it is thought that it will be approved almost without change by Finance Minister Yuval Steinitz.

The list is expected to include dishwashers, washing machines, razor blades, sewing machines, baby strollers, toys, ballpoint pens, hot beverage dispensers, glassware and porcelain. The list also includes silver and gold jewelry and pearls, as well as stovetops and ovens, suits, coats, scissors and knives, medications, plastic products and raw lumber.

The elimination of duty on these items would implement one of the recommendations of the Trajtenberg committee, which was convened in response to last summer's protests over the cost of living. Subsequent steps are expected to include a reduction of duties on products for which there is local competition. The Trajtenberg panel recommended these duties be eliminated over a period of two years; but in an effort not to hurt Israeli industry and under pressure from the manufacturers, the government decided to spread out the move over a longer period.

The second phase should also force Israeli manufacturers to lower their prices to meet the foreign competition. Similar steps to eliminate duties are expected to be taken in the future on food imports.