New taxes for tourists to help Israel battle deficit
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New taxes for tourists to help Israel battle deficit

Visitors to start paying VAT as part of austerity measure package

Tourists take a stroll on the Tel Aviv promenade (photo credit: Serge Attal/Flash90)
Tourists take a stroll on the Tel Aviv promenade (photo credit: Serge Attal/Flash90)

JERUSALEM (JTA) — Israeli Finance Minister Yair Lapid will propose a plan to charge tourists with the country’s value added tax.

Lapid hopes to push the plan through the Knesset in time to implement 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.

Most Western countries do not exempt tourists from taxes on goods and services, Haaretz reported.

Lapid wrote of the difficulty of the austerity measures on his Facebook page.

“It is hard, and people are angry, but it just means taking responsibility: to do what is hard, knowing that people are mad at you,” he wrote.

Other austerity measures include a reduction in the child allowance and raising taxes, including a 1.5 percent hike on income.

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