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The Minister of Tourism met in emergency session with the tourism industry leaders in Israel in order to examine the significance of the Treasury’s decision to propose a change in the law to cancel the VAT exemption for foreign tourists.

Among those present at the meeting were Mickey Federman, chairman of the Dan Hotel chain, Eli Gonen President of the Israel Hotels Association, Shmuel Marom chairman of the Israel Incoming Tour Operators Association, Moni Bar chairman of the Association of car rentals in Israel, Ami Hirschstein of the Israel Hotels Association, Rafi Ferber and Noah Chen, vice presidents of the Hotels Association.

The leaders of the tourist industry expressed their fear about the decision to remove the exemption on services currently free of VAT, such as hotel accommodation, car rental, and bus travel.

Mickey Federman, Eli Gonen and Shmuel Marom commented that the move by the government would be a grave mistake that would cause serious damage to incoming tourism and was illogical at a time when the tourism industry in Israel was still reeling from the effects of the worldwide economic recession as well as the geopolitical situation in the region.

Minister Misezhnikov emphasized the importance in ensuring that tourism services remain VAT free.  He stressed his commitment to ensure that this issue was removed from the final draft that will go before the government for approval in the coming weeks.  In addition the minister also updated the participants on the detailed work being carried out by his department on a legal and economic level, in order to provide a rational and professional justification for not imposing VAT.