State to open VAT-free store at Ramon Airport
The Israel Airports Authority issued a tender for a VAT-free store at Eilat Airport, where 25% of Israel’s mobile phones are sold. The VAT hike next year will increase the city's appeal.
A study conducted for the Israel Airports Authority reveals that about a quarter of all mobile phones sold in Israel are sold in Eilat, with a total turnover of approximately NIS 1.5B annually. Now, the state also wants a share.
The Israel Airports Authority has issued its first tender for the operation of a VAT-free mobile phone and electronics store at Ramon Airport. The store will be open to all travelers arriving in Eilat by flight or car and will allow them to purchase the devices before reaching Eilat. This will save time during the vacation and avoid the long lines in the city’s stores.
Eilat is a magnet for Israelis looking to purchase mobile phones or various electronics and benefit from the zero VAT rate. This is expected to be even more attractive due to the anticipated VAT increase starting next year.
A study conducted by the BDO consulting firm for the Israel Airports Authority shows that approximately 25% of all mobile phones sold in Israel are sold in Eilat. The annual turnover from mobile phone sales in the city is about 1.5 billion shekels. In addition, popular electronics sales such as smartwatches, vacuum cleaners, and more are included.
Ramon-Eilat Airport, located about 19 km north of the city of Eilat, also benefits from a zero VAT rate.
However, what may hinder the success of the project is the ongoing decline in the number of passengers at the airport, due to the complications of flights from Ben Gurion after the closure of Sde Dov Airport and the low number of international flights.
As part of the operation of the store, the tender winner will be able to sell a wide variety of mobile and electronic products, including mobile phones, tablets, headphones, vacuum cleaners (including robotic vacuums), smartwatches, gaming products, and accessories. The designated store will be located in the public hall of the airport and will be accessible to all travelers. Additionally, like stores in Eilat, customers will be able to pre-order the device and only pick it up at Ramon. According to the tender terms, the contract will be for a period of 3 years, with an exclusive option for the authority for another 36 months.
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