| By Sapir Peretz, Globes, Tel Aviv, IsraelMcClatchy-Tribune Regional News May 08--"The government has fired a guided missile into the heart of the tourism industry," said Israel Hotels Association president Ami Federmann in response to the Ministry of Finance's plan to levy VAT on incoming tourism services, such as hotel accommodations, travel, and the purchase of durable goods. The Hotels Association warns that levying VAT on tourism services will cost 7,600 direct and indirect jobs in the industry, and will sharply raise prices for tourism services. In a letter to Minister of Finance Yair Lapid and Minister of the Economy Naftali Bennett Alfred Akirov, David Fattal, and other hoteliers said that they view with deep concern the plan to levy VAT on tourism services. "We are already investing in hotels overseas, and not in Israel because profit margins in Israel do not offer a return on investment. Hotel prices in Israel are also very high, for reasons which have nothing to do with operating efficiency," they wrote, adding that levying VAT will worsen the industry's condition, which is still suffering from last year's Operation Pillar of Defense, as well as the security situation in the north, and the strengthening of the shekel against the dollar. Manufacturers Association president Zvi Oren said that taxing incoming tourism services discriminated against industry. "There is no economic logic to the measure, because its financial damage is liable to be greater than the revenues that the government hopes to see," he said. In a letter to Lapid, Dead Sea Hotel Association chairman Nehemia Ben-Porat said, "Levying VAT will severely harm the spa tourism industry, in which many efforts have been in invested." David Fattal is the owner of Fattal Hotel Management Ltd., Akirov is the chairman of Alrov Properties and Lodgings Ltd. (TASE: ALRPR), and Federmann is the controlling shareholder in Dan Hotels Corp. Ltd. (TASE: DANH) ___ (c)2013 the Globes (Tel Aviv, Israel) Visit the Globes (Tel Aviv, Israel) at www.globes.co.il/serveen/globes/nodeview.asp?fid=942 Distributed by MCT Information Services |
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