The land of discounted milk and honey: Lapid lowers import taxes ahead of holidays

Ahead of holiday, finance minister helps Israeli families celebrate the holidays without extra financial worries.

September 4, 2014 19:08
2 minute read.

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As Rosh Hashana approaches, Finance Minister Yair Lapid decided to expand import tax exemptions on honey and several other agricultural products.

Anticipating a shortage of honey in the local market, Lapid on Wednesday approved import tax exemptions for large containers of honey up to a cap of 600 tons and for retail packages of the product with a cap of up to 150 tons, the Tax Authority said. The exemptions will prevent a rise in the price of honey in stores, particularly for Rosh Hashana, the authority stressed.

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“The holidays are approaching and our goal is to make things easier for customers,” Lapid said. “We are committed to Israel’s middle class.

We will continue to lower the cost of living in Israel.”

The finance minister implemented similar orders for eggs, egg yolks for ice cream production and milk powder.

The quota on tax-free egg imports will be increased from 150 million to 250 million, the Tax Authority announced. This decision occurred in order to bridge the temporary shortage of supply in the domestic market, which has occurred in part due some hatchery closures due to a Newcastle disease spread among poultry, coinciding with an increased demand in eggs, the authority said. Increasing the cap on tax-free egg imports will thereby allow for a steady supply of eggs for the near future and curb pressures that could lead to an increase in consumer prices, the authority added.

Focusing the ice cream industry in Israel – which is mostly produced for export – Lapid approved a tax-free import quota of 150 tons worth of egg yolks for use in this sector. Such a move will enable Israeli ice cream producers to endure global competition, the Tax Authority explained.

Meanwhile, due to the fact that prices on milk powder in the European Union have risen, imports of the product in Israel have shrunk.

To prevent milk powder from becoming increasingly expensive to Israeli consumers, Lapid decided to raise the quota of tax-free imports from 1,200 to 1,700 tons of the product, the Tax Authority said.

In response to these decisions, Israel Farmers Federation secretary-general Avshalom Vilan slammed the move as damaging to the country’s farmers.

“Lowering taxes on milk powder, when the country has enormous surpluses of milk powder, is contrary to the Locker Outline and agreements,” Vilan stressed.

Vilan was referring to government guidelines developed by Prime Minister’s Office director-general Harel Locker, which aim to both lower consumer pricing and ensure development of the local dairy industry.

Examining the decision to eliminate import taxes on honey, Vilan stressed that this action will “fatally injure Israeli agriculture.” The largest honey beehive in Israel, located in the southern kibbutz of Yad Mordechai, already suffered greatly from security situation during Operation Protective Edge, according to Vilan.

“Reducing the quotas will not roll down prices for the consumer, so this was a cheap and ugly act of populism,” he said.

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