Published On: Wed, Oct 29th, 2014

Israeli Treasury to Encourage Internet Purchases Abroad to Offset Cost of Living

Shopping online

The Ministry of Finance is removing barriers and facilitating purchases of overseas products on the Internet, as part of its comprehensive program for lowering the cost of living currently being formulated. Internet purchases, especially from overseas, are one of the economy’s most rapidly growing sectors today, and the Finance Ministry regards it as an important channel in the effort to bolster competition and reduce the cost of living. The volume of Internet purchases from overseas by Israelis has soared by triple-digit percentages, and is currently estimated at NIS 5 billon a year. Estimates are that over two million Israelis, mostly young people, buy products from overseas. The most popular products in online purchases are smartphones, accessories for laptops and PCs, tablets, women’s and children’s clothing, baby products, and books.

In recent weeks, the Ministry of Finance Budget Department has begun devising ways and measures for expanding the volume of Internet purchases from overseas. So far, mostly regulatory aspects involving purchases from overseas have been considered, although the Finance Ministry is not ruling out consideration of questions like payment to the credit card company. The subject of taxation on overseas purchases has not yet been considered, among other things because current import taxes grant a full exemption for up to $75 on each product.

An Internet purchase is defined as a personal import – a field in which the cost of living cabinet has undertaken to remove barriers, following the recommendations by the Trajtenberg Committee. The first question examined by the Finance Ministry was standardization, given the lack of clarity in the standards and various requirements for imported products in Israel. The Finance Ministry, in cooperation with the Ministry of the Economy, is considering the possibility of establishing a computer system to coordinate all the information required by a consumer seeking to buy part of his product basket from overseas through the Internet. For example, a consumer who wants to buy spare auto parts will be able to obtain the necessary information for selecting the right product: what materials or products are banned from importing in Israel, and what documents to demand from the supplier, so that the product can be used in Israel. Another aspect currently under consideration is the obligation to publish rates for the courier service companies. The Finance Ministry is pinning great hopes in this context on the success of the planned postal reform. The planned reform includes, among other things, extending the office hours for post offices to the evening, automation of package delivery, and operation of collection stations located outside post office branches, including in supermarkets and convenience stores.

Published by Globes [online], Israel business news –

Read more about: , , , , , , , , , , , , , , , , , , ,

Wordpress site Developed by Fixing WordPress Problems