Israel Mulling Tourist Tax

Israel’s mounting budget deficit is leading the country’s Ministry of Finance to consider a revenue stream already in practice in many countries worldwide—a tourist tax. The ministry is considering levying the tax alongside other budget-propping steps, several officials at the ministry told Calcalist on condition of anonymity. The Ministry of Finance is also considers doing away with a currently instated tourist VAT exemption, according to these people.

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4.1 million tourists entered the country in 2018, staying on average nine days, according to official data from Israel’s Ministry of Tourism.

Currently levied by 42 countries, tourist taxes are paid by non-citizens entering a country to help combat the negative effects of over-tourism and to invest in tourism-related government projects and initiatives.

Different from a visa fee or a value-added tax, tourist taxes can be collected at different contact points. Japan has recently started charging departing tourists the Sayonara tax, which stands at 1,000 yen ($9.25). Tanzania charges an 18% VAT on tourist services since 2016. In Germany and Italy, different cities include tourist taxes of around 5 euros as part of accommodation fees. Other countries tax tourists’ flight tickets.