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Eli Gonen, President of the Israel Hotels Association commented on the proposal of the Treasury to cancel the VAT exemption for foreign tourists on hotel accommodation and car hire, with the aim of saving 500 million shekels.  Gonen said "An additional 15.5 percent on an existing tourism package, will  severely harm our ability to compete and will result in making Israel an irrelevant destination to many."

Gonen sent a letter to Prime Minister Benjamin Netanyahu, to Minister of Finance Yuval Steinitz and to Minister of Tourism Stas Misezhnikov, arguing that the Treasury's proposal will be disastrous for the Israeli tourist industry and could even cause it lasting damage.  He commented that the decision to impose VAT on incoming tourists and to freeze the budget for overseas marketing will result in Israel becoming far less attractive to tourists.

Gonen added that by making tourist packages more expensive will lead to the collapse of the tourist industry and result in tourists selecting other destinations.  Gonen: "We estimate that this year the number of incoming tourists will be down by 450,000 on last year, this will result in another 20,000 workers losing their jobs and a reduction in revenue for the country."

According to Gonen the high costs that the tourist industry faces in Israel are largely because of government regulations. "Governments In most countries around the world help their tourist industries, here in Israel  it is the opposite."