Treasury launches war on tax evasion

Finance Minister Yuval Steinitz: We will collect NIS 2 billion this year, and NIS 6 billion in 2014.

"Today, we're launching a campaign against black capital. We're launching total war against black capital and tax evaders. We're moving on to the next stage," said Minister of Finance Yuval Steinitz today in his declaration of war.

"The Diamond Unit is already working, we've hired 600 new people, passed very important legislation to tighten enforcement and the war against black capital, and today we are launching a public campaign and the Justice Line, where we invite the public to participate in this struggle," added Steinitz.

"The time has come for the level of black capital in Israel to fall to the level in Western Europe and not to the level in Middle Eastern countries," said Steinitz. "We will collect NIS 2 billion this year, and NIS 6 billion in 2014, so that by the end of the term we will collect an additional NIS 20 billion from enforcing black capital."

Ministry of Finance director general Doron Cohen said, "Our first target is pass the legislation in the Knesset. The second stage is to make all the structural changes at the Tax Authority, which will implement all the structural changes."

Israel Tax Authority director general Doron Arbeli today submitted to Steinitz the recommendations for the struggle against black capital and tighter enforcement, with the goal of tripling the ministry's promise of higher tax collection, made as part of the 2012 fiscal package, to NIS 6 billion a year.

Under current law, weapons and drug dealers who conceal the proceeds of their trade are charged under the Prohibition of Money Laundering Law (5760-2000), and trading in arms is defined as the original crime. The Tax Authority recommending making tax evasion the original crime, which among other things will consolidate information held by the Tax Authority and the Prohibition of Money Laundering Authority. Money Laundering Authority officials have sought this consolidation for a long time, but Tax Authority officials opposed it.

Other recommendations include halving cash transactions from NIS 20,000 to NIS 10,000, and levying a 15% fine on exceeding the limit; legislation to allow sending information to the Tax Authority from the Currency Services Registrar and for the Tax Authority to become the regulator of foreign exchange traders; amending family firm regulations to close tax loopholes; delaying foreign travel by people with tax arrears; permit offsets by taxpayers to prevent hiding assets between spouses; impose guarantees on court-ordered payments; foreclosures on taxes of local authorities and religious councils; and levy taxes on guarantors.

Published by Globes [online], Israel business news - www.globes-online.com - on February 3, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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