"Black capital in Israel is extensive. About 20% of GDP in Israel is black capital. We're talking about NIS 200 billion, according to a World Bank study. We have very clear indications that this number is close to the truth. Israelis have very large amounts of black capital abroad. We recently launched a campaign for voluntary disclosure of assets, under which we got NIS 10 billion. The scale of the problem only became clearer as a result of the campaign," said Israel Tax Authority director general Moshe Asher at the Tel Aviv-Jaffa and Bat Yam Contractors Association conference in Eilat today.
"A large part of the black capital is at moneychangers. We discovered that many of them are very problematic. Some crime families have their own moneychangers for laundering money, so this year we decided that every moneychanger will have to report transactions larger than NIS 50,000."
Commenting on the increase in the Tax Authority's crackdown on rental apartments and tax evasion on rental income above the exemption cap, Asher said, "There are people who lease apartments for a lot of money, far above the exemption, but 'forget' to pay the tax. We carried out checks in luxury areas, and found quite a few cases. But not only in luxury areas. We recently carried out checks in Ashdod and Ashkelon too. We examined 200 rental apartments, and the situation there was not good."
Asher said that another measure that the Tax Authority will undertake to fight black capital will be the establishment of a special team, which will examine whether tax filings are correct when compared with other sources of information. "In 2014, there will be a new project, a first-class intelligence project. We're about to set up a unit of analysts, which will crosscheck information between all the relevant databases. We'll examine whether people have files at Income Tax and whether the filings match reality. Does it make sense that a person who receives income support should own a yacht registered in his name? Is it possible that a person who earns the minimum wage can constantly fly abroad? All these things will be examined," he said.
Asher also noted the work of the recently established committee headed by Prime Minister's Office director general Harel Locker to reduce cash transactions. "We're not talking about eliminating cash transactions, but reducing the use of cash. A large part of black capital turns on cash because there is no trace. The committee will recommend that transactions over a certain amount cannot be made in cash. This will allow us to investigate business turnover."
Published by Globes [online], Israel business news - www.globes-online.com - on November 21, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013