Chambers of Commerce Head Slams Finance Minister Over Failed VAT Exemption
Federation of Chambers of Commerce head Shahar Turgeman criticized Finance Minister Bezalel Smotrich over his failed push to raise VAT exemptions on foreign imports, citing political motives. Smotrich's associates fired back, labeling Turgeman a monopolist harming consumers.
Shahar Turgeman, president of the Federation of Chambers of Commerce, launched a sharp attack on Finance Minister Bezalel Smotrich, claiming that his attempt to expand VAT exemption on overseas orders was driven by political motives rather than a genuine fight against the cost of living. In an interview with local media, Turgeman asserted that the minister sought to gather votes by increasing the exemption threshold.
Turgeman was among the prominent opponents of the move promoted by Bezalel Smotrich, which sought to raise the personal import tax exemption ceiling from $75 to $150. According to an analysis by the Knesset Research and Information Center, tax-exempt personal imports totaled about 5.9 billion shekels in 2023, a 97% increase compared to 2019. Raising the ceiling to $150 could have resulted in tax revenue losses of approximately 1 billion shekels, while also sparking debate over increased competition, lower prices, and potential harm to small businesses.
The initial decree reached the Knesset plenum on February 24 and was rejected by a vote of 59 opponents to 25 supporters. Bezalel Smotrich had clarified before the vote that if the Knesset canceled it, he intended to sign a new decree to lower the cost of living. Following the defeat, a new decree was published just 16 hours later, according to Knesset Legal Advisor Sagit Afik, with the exemption threshold set at $130 instead of $150.
The decision regarding the new amount raised questions in the Finance Committee. Amit Goldman of the Budget Department stated during a discussion that the department was not involved in setting the $130 threshold and that its professional stance remained that the move was not optimal for the economy. Finance Committee member MK Hanoch Milvitsky criticized the finance minister's conduct, noting that no professional discussions or staff work explained the choice of $130, suggesting the move was intended to demonstrate authority.
On June 1, the second proposal was put to a vote in the Knesset plenum. A total of 59 members of parliament opposed the decree while 23 supported it, restoring the exemption ceiling to $75. Turgeman criticized the minister's persistence, claiming it was also an attempt to retaliate against senior economic figures whom Bezalel Smotrich accused of political interference.
In response to the criticism, associates of Bezalel Smotrich issued a sharp counterattack against Turgeman, calling him a cost-of-living agent and the head of a major conglomerate that exploits Israeli families. The response emphasized that public officials must remain resilient against figures who harm the economy and consumers.
