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No More Tax Break for Olim

November 22, 1990
See Original Daily Bulletin From This Date

Immigrants from the Soviet Union and other Eastern European countries will soon receive cash grants instead of the usual tax exemptions for electrical appliances given to new olim, customs authorities said this week.

The grants will be the cash equivalent of the exemptions. Effective Dec. 1, each immigrant family will receive a $2,500 electrical appliance grant. The family will get $750 on arrival at Ben-Gurion Airport, the rest to be paid at the end of their first year in Israel.

The substitution of cash for a tax exemption was explained as a way to discourage immigrants from buying appliances they do not need in order to preserve their exemption rights.

New immigrants to Israel generally receive a two-year exemption from the payment of value-added tax, which can double the price for veteran Israelis of electrical goods or luxury items, such as cars or musical instruments.

The grant is in addition to the $9,000 given to each immigrant family in what is called an “absorption basket” to help them through their first year in the country.

A third of the absorption basket is paid upon arrival in Israel and the balance in monthly installments of $500.

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