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Internet Purchases Tax-Free

The Cabinet approves removing taxes on purchases of items costing up to $320 (1200 shekels) in order to promote competition.
By Tzvi Ben Gedalyahu
First Publish: 12/4/2011, 3:17 PM

The Cabinet Sunday morning approved the removal of all taxes on purchases of items costing less than $320 (1200 shekels) in order to promote competition that hopefully will result in lower prices for consumers. The original proposal was to limit tax-free Internet purchases to approximately $265 (1000 shekels) before the Cabinet increases the tax-free amount.

The move will “make things easier for hundreds of thousands of citizens, if not more, who buy products over the Internet,” said Prime Minister Binyamin Netanyahu.

“The tax exemption on Internet purchases will increase competitiveness and lower prices.  This is an additional step…to lower the cost of living," he added.

Responding to this summer’s protests for “social justice,” the government is planning more actions to reduce the cost of living.

However, two events forced the postponement of approving more measures. A massive traffic jam on the Tel Aviv-Jerusalem highway prevented several Cabinet ministers from arriving for the start of the weekly Cabinet session.

After the ministers began discussing the proposals, they had to make an early exit because of memorial ceremonies for Israel’s first Prime Minister, David Ben-Gurion.

The other proposals, to be discussed next week, include redcuing the price of natural gas for homes, opening the cement market to competition, increasing competition in the gasoline market by allowing new operators to establish 40 new gas stations, and canceling another planned hike in gasoline excise taxes.