Smotrich doubles VAT exemption on personal imports

Minister of Finance Bezalel Smotrich has signed an order that will increase the exemption from VAT and customs duties on personal imports from abroad from $75 to $150 as of tomorrow (Wednesday).

The order says, “To expand the possibility of personal imports without paying import taxes, as part of the government’s effort to ease the cost of living in Israel, it is proposed to amend the order so that goods worth up to $150 will be exempt from customs duties, purchase tax and VAT.” It was also noted that the state’s loss from these taxes is expected to be about NIS 1 billion annually.

Smotrich plans to double VAT exemption for personal imports

The decision was made despite opposition by the Ministry of Finance budget division. The retailers who are expected to be affected by the move are also resolutely opposed to the rise in the exemption. The Association of Chambers of Commerce warned of “the severe economic consequences of the planned move on local trade, on employment and on the stability of businesses in Israel.”

Association of Chambers of Commerce president Shahar Turgeman said, “I don’t know of any other country in the world whose finance minister sends citizens to shop abroad rather than in Israel. Smotrich is launching an election economy, and therefore I am appealing to the prime minister to stop it.”

The VAT exemption on personal imports was raised from $50 to $75 in 2011 following the Trajtenberg Committee’s recommendations on the cost of living. In 2018, the Israel Competition Authority addressed claims in a report on personal imports that the exemption places the retail sector at a disadvantage, noting that while the exemption from taxes and operating expenses places the retail sector on an unequal playing field compared with personal imports, commercial imports benefit from economies of scale that reduce purchase and shipping costs.

Published by Globes, Israel business news – en.globes.co.il – on December 23, 2025.

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