Despite Iran's attitude towards Israel, it holds strong commercial ties with the Jewish state, in the form of export of its fine pistachio nuts to Israel through Turkey.
Any import from Iran is illegal in Israel, and despite the fact that import laws were violated, the Iranian pistachios arrived in Israel duty free.
The Israel Tax Authority on Monday presented this secret trade channel to the finance committee, and estimated that 90% of pistachio imports allegedly from Turkey, actually come from Iran.
The Authority requested the committee to at least approve the imposing of the maximum tax on this illegal import, if it cannot be stopped. The committee is expected to adhere to this request.
The tax requested is 23% of the cost of the import, which is at least NIS 3.5 (about 86 cents) per kilogram.
The Authority said in its request that this tax was actually meant to prevent harming the legal import of pistachio nuts from the United State, that is carried out according to its trade treaty with Israel.
Import from Turkey shouldn't be affected by the new tax, the Authority said, since Turkey-Israel trade ties include a quota of import of tax-free pistachios.
The Tax Authority believes the new tax will divert pistachio imports more in the direction of the United States, at the expense of the illegal Iranian import through Turkey, which will have negligible affects on predicted income.
Knesset Member Reuven Rivlin, head of the Finance Committee, postponed the hearing and decision until next week, due to the importers' objections to the tax injunction.
'American product more expense, but tastier'The importers' attorney, Leon Avigdori, said the injunction was issued under pressure from the US embassy, following a lobby by Californian pistachio farmers.
"The injunction's objective is to give subsidies to American farmer, at the expense of the Israeli tax payer. The American product is more expense, but tastier than the Iranian pistachio, that is of lower quality, and consumed by the working class," said Avigdori.
The lawyer added that the Americans even sent a spy to his office, to collect information on the scope of import of Iranian pistachios from Turkey.
Tax Authority Deputy Director-General Boaz Sofer pushed for the injunction's urgent approval, and was willing to meet the importers halfway by pledging to issue another injunction for the duty free import of 200 tons of Iranian pistachios.
Sofer did not explicitly name the source of the import, but said the tax would only be imposed on countries that are not included in the international trade treaties signed by Israel.
The deputy director-general said, however, that he would not move forward with the compromise proposal until next week's meeting is concluded.