The Israeli coastal city of Eilat is facing challenges in recovering from the economic blow dealt by the war on Gaza, according to data released by the Israeli credit card payment system company "Shva" that tracks credit card payments.
Once a tourist resort, the city has transformed into a refuge for those displaced by the attacks of the Palestinian resistance starting with the operation "Flood of Al-Aqsa."
Reduced Payments
Despite an improvement in consumer spending at the Red Sea resort, "Shva" data indicates that in the week of December 17 to 23, credit card payments were 30% lower than the corresponding week of 2022.
As reported by the Israeli economic newspaper "Globes," Eilat's Mayor, Eli Lankri, has requested a special compensation plan for the city from the Ministry of Finance. This issue was discussed last week by the Knesset's Finance Committee.
During the Knesset discussions, Lankri presented data showing that unemployment in Eilat, located at the southernmost tip of Israel, skyrocketed from 3.4% to 14% since the start of the war. Credit card data demonstrated that it was the most affected city.
The Ministry of Finance is said to have rejected his request for assistance, arguing, among other things, that the city's situation is no different from the rest of the country.
Adequate Compensation
Nevertheless, the Finance Ministry insists that assessments related to Eilat are complicated by its exemption from Value-Added Tax (VAT), and that examinations on the city's companies showed no performance difference between them and companies elsewhere in Israel. Therefore, the general compensation plan satisfies the city's needs.
A meeting is scheduled later this week between the Mayor of Eilat and the Minister of Finance Bezalel Smotrich to discuss whether the city will receive additional assistance.
The newspaper quoted the president of the Institute of Tax Consultants in Israel, Yaron Zinder, saying that Eilat faces the greatest challenges among Israeli cities, with the exception of border settlements in the north and south. However, the situation may improve only when tourism returns to the city.
