Import taxes on food set to go lower

Import taxes on food set to go lower


This week’s article should be of interest to international food suppliers and anyone who eats food in Israel.
On January 29, the Committee to Examine Competitiveness in the Food and Consumer Goods Market submitted its recommendations to the finance minister and the industry, trade and labor minister.

The committee was set up to look into the high cost of food in Israel.

This followed street protests last year and recommendations by the Trachtenberg Committee on socioeconomic change.

The competitiveness committee was tasked with recommending to the finance minister the rates of customs duties that should apply to agricultural goods and food products under customs headers 1 to 24 of the Israeli Customs Tariff Order (Fresh and Processed Foods).

The committee met with representatives of the different entities along the value chain and weighed the effects of a reduction in customs duties, especially on workers in Israeli manufacturing plants.

Recommended cuts

Here are the committee’s main recommendations for reducing customs duties for fresh foods and products that are subject to high customs rates in Israel:

Fresh food products not manufactured in Israel or manufactured in Israel in negligible quantities: should be a reduction of 40 percent to 80% in customs duties.
   Fresh beef: current customs rate is 190%; should be a gradual reduction to 90% over four years.
   Beef calves: current customs rate is 10%; Agriculture Ministry should act to open a fourth quarantine station, which should enable an increase in the number of imported calves and stronger competition in the Israeli market.
   Lamb meat: current customs rate is 50% on frozen and fresh meat; should be a gradual reduction to 30% in two stages over two years.
   Fattened livestock: should be a reduction of 50% for frozen meat and 25% for fresh meat.
   Industrial processed tuna: current rate is 30%; should be a gradual reduction of 12% over four years.
   Sausages and processed meat products: current rate is 50%; should be a gradual reduction to 22% over four years.
   Fruit-juice concentrates: current rate is 35% to 45%, should be a gradual reduction to 12% over four years.
   Other processed food products: should be a reduction of 75% over three years, at the end of which the Finance Ministry will decide regarding the continued implementation of the reduction scheme.

The timing and scope of the reductions will be determined taking into account Israel’s international trade agreements and ongoing contacts with other countries on the subject of trade agreements. It remains to be seen what will finally be adopted and when.

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