Israel’s outrageous customs and tax authority

Legal import of simple goods to Israel sees arbitrary policy; Israeli membership to OECD should prompt change.

By DAVID FIELD
April 8, 2013 21:37
A US CUSTOMS official searches through a bag at an airport.

US customs officer. (photo credit: REUTERS)

Way back in 1992, just after the end of the Cold War, I was in the Ukraine with a group of tourists. Our coach was stopped on the highway by the police, who boarded the vehicle and demanded money from each passenger. In third world countries, one might expect to find such abuse of power by government officials, but not in Israel. Unfortunately, that is not true. The only difference is that here the issue is not the police, but the customs authorities.

Consider the following incident, which took place in 2011. My grandmother’s engagement ring, which she had bequeathed to me in her will, was sent from London for my fiancé Yael. At Ben-Gurion International Airport, the person bringing it in was stopped and the ring seized. I was forced to pay 62 percent of its value to get it back, equivalent to a month’s salary.

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Additional financial loss was incurred because of lost time from work, substantial taxi costs for three trips to Lod, and fees to my lawyer.

The Customs Authority accepted that the ring was mine, a family heirloom for close to a century, and not for resale, but that did not help. It would have made no difference had I brought it in myself.

The taxes and fines I had to pay, amounting to thousands of dollars, were obscene. It is simply natural justice that a person should be allowed to bring in a family heirloom.

It is also important to understand that the ring is an item which could have legally been brought into Israel. It would have been totally within the law had I purchased a ticket for Yael to go to London, who could then have worn the ring on her finger upon her return. The cost of this would have been a fraction of what I ended up having to pay. Customs rejected the idea that I simply take the ring back to London.

The next case study took place a year later. Prior to a business trip to New York I was told by several government agencies that, as a new immigrant, I could bring back both a laptop and an iPad. I also recorded a phone conversation with the customs office in Haifa, to which the official government immigrations website refers, confirming this.

As a good citizen, on my return I went through the red line to declare the laptop and iPad and to present my immigration documents. The computers were seized, and I was told to go to the customs warehouse the next morning. The next day, despite the intervention of my lawyer, was a bureaucratic merry-go-round, in which I was sent from one office to another, with each demanding money – just to get back goods I had been told I would be able to bring in tax free.

It was a degrading experience, during which I was treated little better than a criminal.
At one point I had to wear a special vest and was accompanied by a security guard. Finally, at the end of a long and arduous day, the laptop was returned to me. However, the iPad was withheld on the basis of an instruction by the Communications Ministry that only one item with wireless communication can be brought into the country on a single flight. Only after filling in a totally meaningless form and waiting another week was I able to return yet again to retrieve the iPad – only after having to part with more money, but that goes without saying.

THIS SECOND story highlights several glaring issues. A new immigrant should be able to declare goods at the airport and then take them with him. The inconvenience and cost of having to return to Lod and pay to retrieve them could easily wipe out or even exceed any aliya rights. The fact that customs was not aware of the Communications Ministry regulations is unprofessional. To not honor what they had told me was a major breach of trust. And the regulation itself is absurd.

It is obviously irrational and unfair for an immigrant to be told, “Sure, you can bring in two computers – but you have to have to buy another plane ticket to New York to bring in the second, so as you didn’t we’ll fine you over a hundred dollars.”

But this law makes no more sense for anybody else either, as these same restrictions apply to items which are not new. Imagine the hassle and cost this could mean for a tourist or businessman. The fact that the form one has to fill in to get the authorization contains absolutely no meaningful information about the purpose of bringing the items to Israel shows how ridiculous the whole thing is. Who makes these rules, to whom are they responsible, and what kind of review process exists?

The following three case studies occurred to one of the editors of The Jerusalem Post. The first case involved a small calendar which his mother had both designed and printed. The calendar was obviously homemade and not for sale, indeed it had no resale value. But that did not stop customs slapping a NIS 40 tax on it.

On another occasion, shortly after making aliya, his father shipped to Israel an old jacket which had been left in America. His father had written an estimated insurance value on the UPS shipment so that, if it got lost, he would be able to claim the money for a new one. When it arrived in Israel, customs taxed the jacket at a whopping 40% of the insured value, even though the jacket itself, as a second hand piece of clothing, was worth next to nothing.

The third case is perhaps the most shocking. A book worth $8 (about NIS 32) was sent overnight to Israel as a gift and for his review. Customs charged a tax of NIS 60, the tax being based mainly on the additional shipping costs. If the book was important enough to be sent express, they presumably deemed it as having special value to the editor, so the actual cost of the book itself became irrelevant.

Many of the import and duty laws in Israel are grossly unfair. For example, an Israeli who pays tax on an item brought from abroad, which then fails within the warranty period, will have to pay tax all over again if he brings in or is sent a replacement. While in Britain the allowance for goods is $600 and in the US $800, in Israel it is $200.

Why should citizens who generally earn far less and in many cases have had to risk their lives fighting for their country, have fewer rights? My doctor told me that when he made aliya twenty years ago, he brought in an old XT computer. It was worth about $80, but he was taxed for close to the cost of a new machine. While specific regulations have changed, the ethos of the Customs Authority has not. Israel has since advanced technically and in other ways to match and even exceed many western countries, but in this respect remains a third world state. One blog with complaints about customs tells of an officer removing a baby from a carriage and sending the weeping mother away with the baby in her hand, together with her luggage and another young child.

Now that Israel is a member of the OECD (Organization for Economic Co-operation and Development), it should accept a strict code of practice based upon standard western law. There must be an appeals process which is professional, responsive and independent.

The hideous bureaucracy which I have witnessed first hand has to be slashed. The role of customs is to stop illegal trafficking of goods and abuse of the right to purchase goods abroad, not to unjustly penalize innocent people.


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