Finance Minister Avigdor Lieberman made the change, which will result in the end of a 7% customs duty imposed on South Korean auto imports and a 12% customs duty on air conditioners, after the free trade agreement was ratified in March, according to Israel's Tax Authority.

Israel, it said, will lose as much as 225 million shekels ($66 million) a year in tax revenue as a result of the customs reduction.

($1 = 3.3955 shekels)

(Reporting by Steven Scheer; Editing by Ari Rabinovitch)