Retail Companies Lobby for VAT on Online Purchases

YERUSHALAYIM -

Israel’s clothing industry has struck back at online competitors, lobbying Finance Minister Moshe Kahlon to rescind the exemption from VAT tax for online companies, Globes reported on Thursday.

enior figures in Israel’s retail fashion and shopping mall industries have begun a campaign to halt the flourishing sales in online fashion goods.

Source inform Globes that executives from Castro, Fox-Weizel and Nimrod took part in a meeting with Kahlon, aimed at persuading him to level the playing field in the fashion and footwear markets.

The retail leaders noted the inequality that has been hurting their businesses. Israeli companies must pay customs on imported clothes (6 percent) and footwear (12 percent) and must then collect 17 percent VAT at the retail level. By contrast, the international companies can dispatch consignments to Israel that are exempt from VAT on items below $75, not including shipping.

Surveys have found that 63 percent of online sales in Israel are from overseas.