Reconsider charging tourists VAT, Jewish leaders tell Israel

JERUSALEM (JTA) — An umbrella organization representing U.S Jewish groups has called on Israeli leaders to reconsider a plan to charge tourists with the country’s value added tax.

Conference of Presidents of Major American Jewish Organizations leaders, Richard Stone, chairman, and Malcolm Hoenlein, executive vice chairman, said in a letter sent 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 Jewish State.

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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, 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 budget. The fiscal plan must be passed by Aug. 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. 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,” the letter, sent May 10, said.

“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,” they concluded.