Reconsider VAT on Tourists, American Jewish Leaders Urge Israel

Extra taxes would hurt missions to Israel, claims Conference of Presidents of Major American Jewish Organizations.

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A U.S. Jewish umbrella group called on Israeli leaders to reconsider a plan to charge tourists value added tax.

The heads of the Conference of Presidents of Major American Jewish Organizations leaders, Chairman Richard Stone and Executive Vice Chairman Malcolm Hoenlein, wrote in a letter to Prime Minister Benjamin Netanyahu, Minister of Finance Yair Lapid, and Minister of Tourism Uzi Landau that the plan would hurt missions to Israel and conferences in the country.

Applying the VAT to tourists “would add significantly to the cost for tourists and will, we fear, cause many to reconsider, postpone, or even cancel trips to Israel,” Stone and Hoenlein wrote in the letter last Friday, adding that it could also “negatively impact” programs such as Birthright Israel.

Lapid hopes to push the plan through the Knesset in time to implement it on June 1, when the VAT is set to rise to 18 percent from 17 percent as part of the steep austerity measures Lapid has proposed for the 2013-14 budget. The fiscal plan must be passed by August 1.

Tourists have been exempt on paying the VAT for hotels, travel services and manufactured products.

“The Conference of Presidents has worked hard to encourage increased tourism in good times and in bad. Together with the Ministry of Tourism, we conducted campaigns of many kinds to attract new and repeat visitors to Israel,” the letter said. “We recognize the tremendous economic importance of tourism, but also its hasbara value and its central role in building ties between Jewish and non-Jewish communities around the world and Israel. During difficult times, it was these visits that showed the people of Israel that they were not alone and demonstrated to the world the support that Israel enjoys.

“While we recognize the budgetary need for additional funds and for all to contribute, it is our hope that other sources can be found that will not damage this vital sector of Israel’s economy and diminish its ties to the international community.”

Tourists on a Tel Aviv beach.Credit: Tali Meir

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