‘Power without responsibility – the prerogative of the harlot throughout the ages.’ Thus wrote Rudyard Kipling, author of the Jungle Book, in reference to the British Press. In a similar vein, ‘Leisure without taxation – the prerogative of the tourist in Israel throughout the ages,’ just about sums up the historic approach of the Israel establishment to those willing to spend their vacations in the Holy Land.
Not anymore, it seems.
The recently published economic plan of the new Government takes a blow torch to the peculiarly Israeli clause in the 1975 VAT Law that determines zero rate VAT (meaning VAT at NIL%, meaning no VAT) on such goodies as hotel charges, car rentals, conferences and medical tourism. If it passes into law (or, to be more precise, passes out of law), tourists will find their bills 17% higher than they bargained for, aping their local Israeli counterparts.
And, while the tourists are already on the ropes, in the spirit of journalist H.L. Mencken’s immortal line, ‘Puritanism: the haunting fear that someone, somewhere, may be happy’, the Government also intends to include the Airbnb, the Internet Age’s answer to the traditional Bed and Breakfast, in the definition of ‘Hotel’ ensuring that they pay higher municipal taxes, while enforcing tax registration and 17% VAT.
The Government’s rationale for lunging for the benign tourist’s jugular is entirely economic – if, possibly, flawed. After a detailed analysis – which, given that the Government was only sworn in just over a month ago smacks of a very familiar slapstick approach – it was concluded that the elimination of various foreign tourist benefits to the tourism industry may lead to less tourism , but – in the process – will result in significantly higher balances in the State coffers. Furthermore, the Government punkawallahs claim to have proven the science of alchemy, in that by imposing a clearly regressive VAT tax that traditionally hits hard the pocket of the man in the street, there will be no (or even a negative) effect on the cost of living. The experts may be suffering from a winter bout of that Economics malaise ‘ceteris paribus’ (other things being equal). When the number of tourists drops, unless all the slack is taken up by local clientele (who find it much cheaper to go abroad) there will be a drop in employment with the resultant economic consequences that will attack the State’s coffers from a different direction. Meanwhile, while these price increases will indeed not directly affect the local population, there will surely be a knock-on effect in demand for the shekel, a drop in value of which will increase prices of imported products. How much? Who knows?
Then there are of course the non-economic factors. With a hostile foreign media and many less-than-friendly foreign governments, there is no better way to correct perceived misconceptions than foreigners seeing the place through their own eyes. That extra 17% will not work in the country’s favour.
There is always hope that sense will prevail. Kipling’s advice, ‘If you can keep your head when all about you are losing theirs, And blaming it on you’ rings at least as true with this Government as with any. In the meantime, it would be wise to keep an eye on the small print when booking a vacation this summer.
One thought on “Pickpocketing Tourists”
Great article – less taxie and more political than usual!