(photo credit: Courtesy)
This week’s article should be of interest to international food suppliers and
anyone who eats food in Israel.
On January 29, the Committee to Examine
Competitiveness in the Food and Consumer Goods Market submitted its
recommendations to the finance minister and the industry, trade and labor
The committee was set up to look into the high cost of food in
This followed street protests last year and recommendations by
the Trajtenberg Committee on socioeconomic change.
committee was tasked with recommending to the finance minister the rates of
customs duties that should apply to agricultural goods and food products under
customs headers 1 to 24 of the Israeli Customs Tariff Order (Fresh and Processed
The committee met with representatives of the different entities
along the value chain and weighed the effects of a reduction in customs duties,
especially on workers in Israeli manufacturing plants.Recommended cuts
Here are the committee’s main recommendations for reducing customs duties for
fresh foods and products that are subject to high customs rates in Israel: •
Fresh food products not manufactured in Israel or manufactured in Israel in
negligible quantities: should be a reduction of 40 percent to 80% in customs
• Fresh beef: current customs rate is 190%; should be a gradual
reduction to 90% over four years.
• Beef calves: current customs rate is
10%; Agriculture Ministry should act to open a fourth quarantine station, which
should enable an increase in the number of imported calves and stronger
competition in the Israeli market.
• Lamb meat: current customs rate is
50% on frozen and fresh meat; should be a gradual reduction to 30% in two stages
over two years.
• Fattened livestock: should be a reduction of 50% for
frozen meat and 25% for fresh meat.
• Industrial processed tuna: current
rate is 30%; should be a gradual reduction of 12% over four years.
Sausages and processed meat products: current rate is 50%; should be a gradual
reduction to 22% over four years.
• Fruit-juice concentrates: current
rate is 35% to 45%, should be a gradual reduction to 12% over four
• Other processed food products: should be a reduction of 75% over
three years, at the end of which the Finance Ministry will decide regarding the
continued implementation of the reduction scheme.
The timing and scope of
the reductions will be determined taking into account Israel’s international
trade agreements and ongoing contacts with other countries on the subject of
trade agreements. It remains to be seen what will finally be adopted and
As always, consult experienced tax advisers in each country at an
early stage in specific cases.[email protected]
Leon Harris is a certified
public accountant and tax specialist at Harris Consulting & Tax Ltd.