Finance Minister Bezalel Smotrich has advanced a move to raise Israel’s VAT exemption on personal imports from abroad to $150, allowing Israelis to buy more items online without paying the 18% VAT. For many consumers, the change means cheaper prices and more options, especially on clothing, household items and small electronics ordered from overseas.

But local retailers say the policy hurts Israeli businesses that must still charge VAT and operate under higher costs. Store owners warn that the exemption gives foreign online sellers a major advantage, making it harder for local shops to compete and putting jobs at risk. In response, business groups have organized protests and urged lawmakers to block the move. The cabinet has approved the change, but it still faces a Knesset vote that could overturn it.