Sales tax will no longer be applied to a list of 100 products, starting midnight Sunday. The list includes most of the products that sales tax was applied to, including various electrical products, cosmetics, air conditioners and telephones. The resulting overall reduction in taxation is estimated at NIS 400 million per year, and could save hundreds of shekels per family.
Until now, a 5%-8% sales tax was levied on "white" electric products like refrigerators and washing machines. A 10% tax was applied to air conditioners, a 15% tax to telephony products, and a rate of 3% - 15% to cosmetics.
Prime Minister Ehud Olmert said the tax cancellation was "part of the government's policy of tax reduction that is meant to build an efficient, growth-supportive tax system."