Tourists will maintain their exemption from the value added tax in the 2013-2014 budget passed by the Israeli Cabinet.
The $106.7 billion budget passed May 13 includes a 2 percent across-the-board reduction in spending this year, excluding the defense, welfare and social services ministries.
Next year’s budget of $112.2 billion features a 3 percent reduction with the same exclusions.
Minister of Environmental Protection Amir Peretz of the Hatnua party was the lone dissenter among the 22 Cabinet members who voted on the spending plan, which advances to the full Knesset for approval.
In the original budget proposal, Finance Minister Yair Lapid had aimed to charge tourists with the country’s value added tax. Tourists have been exempt from paying the VAT for hotels, travel services and manufactured products.
The Conference of Presidents of Major American Jewish Organizations had called on Israeli leaders to reconsider the plan to charge tourists with the VAT.
Also in the budget that passed, funding cuts to the Sephardi Orthodox Shas party’s network of schools were delayed by six months to allow time for the schools to find alternative funding or incorporate the country’s core curriculum. — jta