Tourism Ministry officials on Monday report that Prime Minister Binyamin Netanyahu has accepted their position and has agreed to abandoned plans to levy a 16.5% VAT tax on the tourism industry. This would have included a VAT tax on hotel stays, car rentals and other currently VAT-exempt items for tourists, a move that ministry officials insist would have negatively impacted the state’s profitable tourism trade. The announcement comes on the same day the prime minister dropped plans to levy VAT tax on produce.

The tax would have generated over NIS 500 million annually, but tourism officials insist they would have been outweighed by the loss in visitors and tourism dollars. They estimate the loss would have been NIS 94 million, explaining Israel works arduously to promote tourism, competing with many other tourist locations. The extra tax they explain would have made hotel stays too expensive for many, who would have opted to spend their vacation dollars elsewhere.

(Yechiel Spira – YWN Israel)