The Israeli business sector, the fashion industry in particular, is eagerly awaiting the election and a chance to replace its No. 1 nemesis, Finance Minister Moshe Kahlon. It has been a year since the Israeli Chamber of Commerce, organizations representing independent businesses and the Association of Labor and Industry in Israel filed suit against the minister in the Supreme Court against the VAT exemption for online purchases from abroad. In November, the court declined to intervene in the minister’s economic policies.
At the heart of their dispute is an exemption for individual consumers from paying VAT (and customs duties) on purchases worth up to $75 from international websites. The value-added tax in Israel, the same for virtually all products, is 17%, among the highest in the world. However, Israelis who make purchases from international websites are not required to pay it if the sum of the purchase does not exceed $75. All purchases up to $500 are exempted from custom duties.