Yisrael Beiteinu, the Knesset's third-largest faction, has threatened to vote against the national budget over a proposed value-added tax (VAT) levy on incoming tourism. The proposed levy is “stupidity,” said Tourism Minister Stas Misezhnikov.
Misezhnikov warned that the tax would drive tourists to Jordan and Palestinian Authority-controlled areas in Judea and Samaria, where hotels are cheaper than they are in Israel. If the tax passes, Israel could lose almost 300,000 tourists each year, he said.
The reduction in tourism would cost the industry 12,000 jobs, leaving Israel's GDP down by NIS 2.4 billion, Misezhnikov warned.
The tax “will strike a critical blow to incoming tourism to Israel, which has already seriously suffered as a result of the global economic crisis,” he said Thursday. The government has decided to leave the proposed tax in the Economic Arrangements Bill as part of the national budget.
Members of Knesset discussed details of the Economic Arrangements Bill on Thursday. Opposition MKs took part in the talks, their first Knesset activity since walking out earlier in the week as the Knesset discussed the budget.
The opposition opened with a filibuster. Opposition MKs accused the coalition of setting aside too little time for discussions of the bill, and expressed interest in holding more detailed talks over various clauses of the budget.
The proposed budget passed a first Knesset hearing this week, and must pass a second and third hearing to become law.