MoneyFlash 90

Israeli fashion chains have turned to Finance Minister Moshe Kahlon (Kulanu) in an attempt to stop Israeli consumers from doing most of their clothing and shoe shopping online.

According to Globes, the companies asked Kahlon to cancel the current tax exemption on packages received from abroad worth less than $75. They also said the current laws charge Israeli companies 6% import tax for clothing and 12% for shoes, and force them to add VAT to the price paid by the consumer. This, they said, put them at a severe disadvantage when compared to companies who charge no tax.

Non-Israeli sites account for 63% of online shopping, while Israeli-owned sites account for only 37%. As well, 22% of respondents said they buy only from non-Israeli sites, and an additional 30% said more than 40% of their online shopping is from non-Israeli sites.

In addition, the number of Israelis buying online has risen in the past three years from 30% in 2013 to 60% in 2016. Though some Israeli fashion chains do offer an option to buy online, the variety is often limited and the prices are the same as in the actual store.

The report said Kahlon refused to discuss canceling the VAT exemption for packages arriving from abroad, but was willing to discuss lowering the import tax for Israeli companies.