Israeli shoppers stormed electrical appliance stores and automobile show rooms today in anticipation of a imminent sharp rise in import duties. The Ministerial Economic Committee, which was meeting this afternoon, is expected to announce a series of measures to cut down imports and curb run-away inflation.
In addition to raising duties on imports, the government is expected to re-introduce compulsory deposits by importers, which is an indirect tax and to increase the sales tax on imported items. Customers jammed shopping centers to make their purchases before the expected deadline. Shekem, one of the largest department store chains, reported increases of 17-22 percent in the sale of electrical appliances during the past week. Automobile salesmen reported a surge in demand with customers ready to pay cash for cars if they are delivered immediately.
The measures planned by the Treasury to curb imports by higher levies and taxes are a substitute for a higher rate of devaluation of the Shekel which the Finance Ministry considers ineffective and inflationary. The immediate result has been a heavy demand for foreign currency during the past three days which has sent the cost of dollars soaring.
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