Sources inform ''Globes'' that the Ministry of Finance and the Israel Tax Authority are preparing for a "horror scenario" that could see tax revenues plunge by a far greater sum than NIS 10 billion. In recent weeks, a team appointed by Tax Authority director Yehuda Nasradishi has been looking at ways to tackle the anticipated shortfall in tax revenue. It is believed that since Israel is now on the verge of a severe slowdown, and that 2009 will be a tough year, it is highly likely that the slump in tax revenues could be as much as NIS 30 billion.
Sources close to the issue say that in an instance like this, there will be no avoiding a review of the proposed tax cuts, some of which could even be cancelled. This could also include a freeze of the multiyear reform of income and company tax. "Our goal now is to get money into the system," said one of the participants in the recent meetings.
One of the ideas raised is to allow tax debtors to pay off the money they owe in as many as 30 installments. Sources say that Nasradishi recently gave regional managers the authority to extend debt payment arrangements from 24 installments to 30, for debts of NIS 500,000 and higher (instead of the current NIS 1 million threshold).
In addition, Nasradishi has issued a directive allowing VAT payments to be made every two months on turnover of up to NIS 1.5 million, instead of the current situation where VAT can be paid once every two months on turnover of NIS 800,000 and upward.
As first reported by "Globes", the Ministry of Finance also intends to switch to payment of VAT in cash and expand the number of business that can pay their VAT once every two months.
Published by Globes [online], Israel business news - www.globes-online.com - on November 11, 2008
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