Panel Advises Keeping Lid on Online Purchase Tax

A government committee has recommended keeping the ceiling on exemption from import tax for online orders at $75, compared with a global average exemption ceiling of $200, Globes reported on Tuesday.

Aside from the exemption ceiling, the committee did suggest certain measures to facilitate online shopping, such as streamlining procedures that currently delay deliveries and make purchases more expensive.

“Excessive regulatory requirements lengthen the process of releasing products from customs, sometimes for an extremely long time, make it difficult and unclear to the consumer, and are liable to impose high costs that render the transaction not worthwhile. There are barriers in the way of personal import business ventures. For example, only 30 percent of the current products on U.S. website Amazon.com are delivered to Israel, among other things because there is no direct delivery to Israel,” the committee said in its report.

Pressure to protect local businesses, especially small businesses, reportedly figured in the panel’s decision not to recommend an increase in the exemption amount.

The panel was appointed three months ago to study the matter against a background of rising online purchases.

A survey conducted by the Ministry of Economy and Industry found that as of 2016, online retail business in Israel totaled NIS 7 billion, including NIS 2.9 billion in personal imports; 3.7 million buyers made personal imports accounting for 40 percent of all online purchases in Israel. The market has grown by 22 percent annually since 2013, and the number of buyers has grown by 5 percent.

The committee was headed by Ministry of Finance deputy budget director Shira Greenberg in cooperation with Ministry of Economy and Industry director general Shay Rinsky.