Everything stated before is true especially concerning the economic impact. as someone who visits Israel 6 times a year i can tell you that a VAT imposition on my visits will make me consider other places to visit or not visit at all. With all the brilliant people in Israel they have an idiot running finance. What a shame.
Report: IDF find M-16 rifle hidden in Palestinian's car in West Bank (Haaretz)
from the article: Tourists to Israel may have to start paying taxes on hotels and services