As part of the Ministry of Finance’s economic plan to lower the cost of living, a series of orders were published today (Monday) for the public to cancel tariffs, including:
- Elimination of covers of 12% on all imported furniture products – and in particular beds, sofas, chests of drawers, chairs, cabinets and more. The scope of the furniture market in Israel is estimated at NIS 7-8 billion, and the abolition of customs duties is expected to reduce its price to the consumer.
- Elimination of caps on a variety of consumer products including medicines and medical products, toilet paper, matches, room perfumes, notebooks and albums, faux fur, fireworks, insecticides and fungicides, tapestries, handkerchiefs, tablecloths and napkins, envelopes, calendars and coloring books for children.
- In addition, an order to reduce caps on products and raw materials for industry such as: various salts, oils, nitrates and phosphates, compounds, fertilizers, pesticides, plastics and its products, various rubber products and dyes and more.
This reduction in tariffs is expected to lower the costs of enterprises, increase productivity in the economy and help enterprises succeed in the current period.
Along with reducing consumer prices, the “Zero Customs” program is expected to help open up new markets for imports, reduce regulation and increase parallel imports.
The tuna as an example
At the initiative of MK Michael Bitton, chairman of the Economics Committee, the committee today continued a series of discussions dealing with the cost of living in Israel, and dealt with centralization in imports and the effect of lower tariffs on food and consumer prices.
Chairman Bitton opened the discussion and said that the government’s plan to lower the cost of living is limited in his opinion, and only a small part of it is allocated to the weaker sections. He referred to the plan to lower caps and said that it is about 1.3 billion shekels that are allocated for this, and it does not always reach the consumer. At the end of the discussion, Chairman Bitton called for consideration of transferring the amount allocated to reduce tariffs in favor of work grants to low-wage earners.
Piltona CEO Yaakov Cohen said that before the tariff was reduced, there were 5 factories in Israel for the production of tuna and then only one remained. He added that Piltona is creating competition with importers, and especially with Starkist, which holds 40% of the market, and said that the price before the reduction compared to the price after that has not changed. He even warned that a further reduction would put the plant at a loss, the plant would be closed and workers fired.
On the other hand, the owner of the Willy Food company, Yossi Williger, said that there is no tuna industry in Israel, because it is only packaged here. According to him, consumers will benefit from NIS 80-90 million, by lowering the price of tuna, as a result of lowering customs duties. He explained that the market is sophisticated and will have competition that will lower the price to the consumer.
MK Yaakov Margi said that there is a market failure and centralization in the food industry that needs to be addressed, and perhaps only NIS 0.3 billion will go to the consumer and another billion will go to the importers’ money.
MK Uri Maklev added that we need to address the value part of food production, and see what is happening now in Europe.
MK Inbar Bezeq joined in and even told in tears about her father who was a fisherman and “for 20 years he got up every morning, entered the frozen waters of the Dan and left with a truck to market fresh fish in Israel.” According to her, the recent reduction in tariffs in the industry reduced tariffs from NIS 11 per kilo to NIS 1.8, the price to the consumer remained the same and hundreds of farms were closed.
The chairman of the business sector presidency, Dovi Amitai, called the economic plan “live and forgot” and said: “They shoot and forget, do not check what the purpose was and do not look at previous committees that ruled that lowering tariffs does not roll over to the consumer.”
Chairman Bitton concluded the discussion and called on the government not to reduce tariffs by NIS 1.3 billion before the inter-ministerial committee to examine the brokerage gaps would end its work, and asked to treat Tuna as a test case.
At the same time, Adv. Uriel Lin, president of the Association of Chambers of Commerce, today issued a call to the Minister of Finance demanding the immediate abolition of the 12% customs duty on the import of canned tuna to Israel.
Lynn said anyone reading the map of global food change today must understand that there is no more room for discrimination in tariff rates between importing tuna in lumps and importing tuna in cans.
In the face of rising prices of raw materials and food, it is important to allow the free and increased import of tuna to Israel. Tuna is a quality food with a high health value, cheap and high in protein.
Lynn emphasizes that “the abolition of customs duties at a rate of 12% on the import of canned tuna to Israel will eliminate unjustified and unreasonable discrimination between the import of tuna in lumps that are completely duty-free and the import of tuna in canned goods.
In Israel, there are eight importers of canned tuna at different levels of quality and prices. And they have a real competition between them. The abolition of customs duties will lead to the entry of more importers and a reduction in prices for consumers and will also increase household consumption for this important food item.