Finance Minister Smotrich vows renewed battle after economic reform rejected by coalition dissenters and opposition alliance in dramatic parliamentary showdown.
The Knesset on Monday evening rejected an order to expand VAT exemptions on imported goods, a policy initiative led by Finance Minister Bezalel Smotrich aimed at reducing consumer costs. The vote ended with 25 Members of Knesset supporting the measure and 50 opposing it, exposing visible fractures within the governing coalition.
Two members of Otzma Yehudit, Minister Amichai Eliyahu and MK Limor Son Har-Melech, voted against the proposal. Several Likud lawmakers also broke ranks, including Yuli Edelstein, David Bitan, Eli Dallal, Sasson Guetta, Shalom Danino, Hanoch Milwidsky, Akram Hasson, and Osher Shkalim. MKs Avi Maoz and Yitzhak Goldknopf likewise opposed the order.
Adding to the political drama, a notable number of haredi MKs were absent from the vote, along with several senior government ministers, raising questions about coalition coordination and internal discipline.
The rejected order sought to broaden VAT exemptions on certain imported goods, a move supporters argued would increase market competition and reduce living costs. Critics inside the coalition warned of fiscal implications and potential harm to local industries.
In a sharply worded response, Smotrich accused what he described as an “economic left” within Likud of prioritizing political maneuvering over public welfare. He argued that blocking the measure would ultimately burden Israeli consumers with higher prices and protect entrenched monopolistic interests.
Smotrich declared he would not retreat from the initiative and announced plans to sign a revised order in the near future. He framed the struggle as a broader ideological contest over Israel’s economic direction, pledging to continue advancing policies he believes will make living costs more affordable.
