An embarrassment for Netanyahu, a blow to Smotrich: Likud and Otzma Yehudit overturn the VAT order

Aryeh Rivkind
February 24, 2026   
Photo: 
Noam Moskowitz/Knesset Spokesperson

The Knesset plenum rejected this evening (Monday) the order expanding the VAT exemption on products from abroad, which was announced by Finance Minister Bezalel Smotrich.

This is an order signed by the Minister of Finance, which doubles the VAT exemption on personal imports, to an amount of $150.

At the beginning of the discussion, Minister Smotrich announced that "if this order falls, I will sign a new order because I am determined to lower the cost of living.".

MK Eli Dellal of the Likud said: "This activity is issuing a death sentence to the business sector. I'm talking about small businesses here. The cost of living is in housing, rent and food, and unfortunately they haven't taken care of that in the last three years.".

25 MKs supported the proposal against 59 opponents. The opposition, of course, is jubilant.

Minister Amichai Eliyahu and MK Limor Son Har Melech of Otzma Yehudit voted against. From the Likud, Yuli Edelstein, David Bitan, Eli Dellal, Sasson Guetta, Shalom Danino, Hanoch Milbitsky, Akram Hasson and Osher Shekalim opposed the proposal. MKs Avi Maoz and Yitzhak Goldknopf also opposed the proposal.

A significant portion of the ultra-Orthodox Knesset members were absent, as were senior government ministers.

Finance Minister Bezalel Smotrich responded to the defeat of the order to expand the VAT exemption on products from abroad in the Knesset and announced that he will soon re-sign the order.

""The economic left in Likud is trying to win over the citizens of Israel in the service of monopolies and for a few votes in the primaries. While Prime Minister Netanyahu is busy with Israel's security, a handful of Likud MKs are busy with petty politics and, together with the opposition, want to make us all pay dearly. I will not let the public lose.".

""Narrow personal interests will not prevail over the good of the citizens of Israel. I do not intend to give up and surrender to the left. With God's help, I will sign a new decree and continue to take care of the citizens of Israel. In the face of the entire left, it can be cheap here.".

Opposition leader Yair Lapid was quick to celebrate: "Netanyahu has no coalition and his government is falling apart. He doesn't even control his own party. He and Smotritz were humiliated again today in the plenary. We will continue to fight in the Knesset against the worst government in the history of the country.".


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