The Federation of Israeli Chambers of Commerce (FICC) staged a protest outside of Finance Minister Bezalel Smotrich's office ahead of a scheduled press conference regarding raising the VAT and customs exemption on packages from 75 to 150 dollars.
“Smotrich is taking us hostage. He thinks this is what will help him pass the electoral threshold,” self-employed business owners said at the protest, going on to address Prime Minister Benjamin Netanyahu: “You understand economics, you know this is going to hurt small businesses."
Protesters also warned of the economic implications of the move for local commerce, employment, and business stability in Israel, saying that the move “will be remembered in infamy."
"When you [Smotritch] were in the opposition, you called to cancel this exemption because you saw what it does to small businesses, how they close because of giant Chinese manufacturers that wipe us out due to the costs," small-business owners said. "You flipped overnight, once you fell below the electoral threshold.”
Smotrich signs import reform order, Finance Ministry officials oppose move
“I have now signed an order exempting personal imports up to 150 dollars from tax, and I would like to expand a bit on the meaning of this decision,” Smotrich said at the afternoon press conference. “This move is part of a broad and significant series of steps that I am leading within the framework of the state budget, with one clear goal: lowering the cost of living."
"We are doing this through the milk reform, opening the deposit market to competition, and additional steps, all based on a simple worldview: it can be cheap here.”
Senior Finance Ministry officials opposed the move, which, according to estimates, could reduce state tax revenues by approximately NIS 1.25 billion per year, in addition to a loss of about NIS 1 billion already recorded this year due to the existing exemption on personal imports of up to 75 dollars.
As a result, cumulative damage of around NIS 2.25 billion to the state treasury is expected in 2026, representing more than 1/10 of 1% of the budget deficit. The Finance Ministry also estimates that expanding the exemption will encourage further growth in personal imports, beyond the 52.8 million packages that entered Israel from overseas websites in 2025.