Israeli smugglers hit by lower taxes

By , Jerusalem

WITH a cut in hefty taxes on electronic goods on Feb. 7, an Israeli national sport became less lucrative. Smuggling home anything from a hairdryer to a personal computer has long been a good enough reason for an Israeli to travel abroad. Now it will be less profitable. The move comes as part of Israel's ongoing efforts to open up its market, privatize state-owned firms, and generally shrug off its socialist heritage.

The tax on computers will come down from 16 percent to 10 percent, and on fax machines from 42 percent to 30 percent, in the hope of spurring Israel's technological development. The 85 percent tax on car radios and tape decks was slashed to 40 percent. The police hope that making these items cheaper also will make them less attractive to thieves.

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