ROMSO Cyprus Knowledge Base

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TRAVEL TAX, OR IN ITS FULL NAME FOREIGN TRAVEL TAX, IS A TAX IMPOSED ON TRAVEL CARDS ABROAD, FOR CITIZENS OF THE COUNTRY WHO ARE TAXING THE TAX. GENERALLY, THE TRAVEL TAX IS CONSIDERED PERMITTED.

TRAVEL TAX WAS USED IN THE 1960S IN MANY COUNTRIES. IN 1964, THE WORLD SHIPPING CONFERENCE DECIDED TO SEPARATE THE PRICE OF THE STAY IN THE SHIP AND DEMAND THAT THE TRAVEL TAX BE PAID ONLY FOR THE PRICE OF THE JOURNEY.

IN ISRAEL
IN ISRAEL, A TRAVEL TAX WAS FIRST TAXED IN A LAW THAT WAS ENACTED IN THE KNESSET IN NOVEMBER 1950. THE LAW ESTABLISHED A TRAVEL TAX RATE OF UP TO 50 PERCENT OF THE CARD’S VALUE, WITH THE POSSIBILITY OF EXEMPTING TRAVELLERS FOR MEDICAL, STUDY AND GENERAL GOOD. IN MARCH 1953, IT WAS DISCUSSED IN THE KNESSET TO INCREASE THE MAXIMUM RATE TO 100%. AFTER RECEIVING THE LAW, 100 PERCENT TAX RATES WERE SET FOR PASSENGERS IN THE FIRST CLASS AND 75% FOR TOURISTS. IN MAY 1956, THERE WERE MUCH LOWER RATES OF UP TO 25% PER TICKET. IN DECEMBER 1956, THE TAX RATE WAS INCREASED TO 33%. IN MARCH 1958, THE TAX RATE WAS RAISED TO 40%, IN ADDITION TO WHICH THE EXIT OF 20 TO “I.E., AND A TAX OF 15 TO 20 PERCENT ON THE TICKETS SENT OUTSIDE THE COUNTRY WAS SET. THEY OPPOSED THE INCREASE OF TAXES AND RECEIVED FREEDOM OF VOTING FOR THE LAW. IN JULY 1958, THE TAX ON THE TRAIN TICKETS WAS REDUCED TO 25% IN ORDER TO ENCOURAGE THE PURCHASE OF THE TICKETS IN ISRAEL AND THE PAYMENT OF THE TAX, INSTEAD OF PURCHASING OUTSIDE ISRAEL. IN THE EARLY 1960S, THE TAX RATE WAS RAISED TO 55%, THE MAXIMUM RATE THAT WOULD NOT RESULT IN MASS TRANSFER TO THE PURCHASE OF BLACK-MARKET TICKETS.

IN THE LATE 1950S AND EARLY 1960S, THE TREASURY OPERATED TO IMPOSE A PERMANENT TAX ON FOREIGN TRAVEL TO ISRAEL TO DEAL WITH THE EVASION OF TAX PAYMENTS BY TRAVELING TO A CLOSE DESTINATION AND FROM US TO A MORE DISTANT DESTINATION. FOR THIS PURPOSE, THE AMENDMENT TO THE LAW WAS ESTABLISHED IN EARLY 1961 THAT THE TAX CAN BE DEPOSITED AS A FIXED AMOUNT, AND NOT ONLY AS A PERCENTAGE OF THE TICKET PRICE, PROVIDED THAT THE TAX RATE WILL NOT EXCEED THE PRICE OF THE CARD. THE TAX LIMIT TO THE PRICE OF THE CARD IS MADE AS A COMPROMISE BY THE GOVERNMENT TO TRANSFER THE LAW. IN OCTOBER 1961, A TRAVEL TAX WAS RAISED IN THE AMOUNT UNTIL THEN A DEPARTURE PERMIT WAS MADE. AFTER THE ELECTIONS FOR THE FIFTH KNESSET, THE GOVERNMENT APPROACHED THE CANCELLATION OF THE CEILING, AND SUCCEEDED IN RAISING THE CEILING IN 150 CE. IN EARLY 1964, THE TRAVEL TAX WAS RAISED AGAIN. THE TAX IS ABOUT 5% OF THE TICKET PRICE IN ADDITION TO A FIXED AMOUNT. THE TRANSITION TO THE TAX AT A FIXED RATE HAS CAUSED A MAJOR DEAL IN THE COMING COUNTRIES TO ISRAEL AND THE SHIPPING COMPANIES THAT HAVE BEEN LIMITED TO THE TAXES THAT ARE HURTING THEM AFTER THE STATE ENCOURAGED THEM TO BUY NEW SHIPS. THIS WAS FOLLOWED BY A COMMITTEE FOR EXAMINING THE TAX, WHICH RECOMMENDED IN MOST OPINIONS ABOUT THE SMALL IN THE TAX RATE, BUT ITS RECOMMENDATIONS WERE REJECTED.

AT THE END OF 1977 WITH LIBERALIZATION IN FOREIGN CURRENCY LED BY THE LIKUD GOVERNMENT, THE TRAVEL TAX WAS CANCELLED. IN ITS PLACE, AN ADDED TAX WAS PLACED ON THE TRAVEL CARDS. IN 1979, VOICES RELIED ON THE RE-DIRECTION OF TRAVEL TAX. STATE REVENUE MANAGER URIEL LYNN EXPRESSED OPPOSITION TO THE IDEA BECAUSE OF THE DESIRE TO REDUCE THE NUMBER OF TAXES, INCREASE EXEMPTIONS FROM THE TAX AND DIFFICULTY IN ITS BACK WHEN YOU CAN PURCHASE FOREIGN CURRENCY AND BUY TRAVEL CARDS OUTSIDE THE COUNTRY. DESPITE THIS, IN OCTOBER 1979, THE GOVERNMENT DECIDED TO RESETTLE TRAVEL TAX IN A FIXED AMOUNT AND IN JUNE 1980 THE TREASURY DECIDED TO RE-ESTABLISH THE TRAVEL TAX. THE IDEA OF LEADING THE TAX IN THE WAY OF EMERGENCY REGULATIONS WAS REJECTED BY THE ATTORNEY GENERAL ISAAC ZAMIR, AND THE TAX WAS NOT IMPLEMENTED. IN MARCH 1983 TO FIND FUNDING FOR THE COALITION AGREEMENT WITH THE RELIGIOUS PARTIES, IT WAS DECIDED TO LEAD A $50-HIGH TRAVEL TAX. IN SEPTEMBER 1983, THE GOVERNMENT SOUGHT TO DOUBLE THE TRAVEL TAX RATE TO $100. AFTER THE PROPOSAL FAILED, THE MINISTER OF FINANCE SOUGHT TO LEAD A TAX THAT INCLUDES A RELATIVE COMPONENT OF THE TICKET PRICE, BUT RETURNED TO IT AND ASKED TO RAISE THE TAX TO $125. THE TAX WAS FINALLY RAISED TO $100, AND LATER REACHED $300. IN SEPTEMBER 1985, IT WAS DOWNLOADED TO $150 AND $100 PLUS 20% OF THE TICKET PRICE.