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Jerusalem - Israel Passes Law To Limit Cash Deals To Fight Economic Crimes

Published on: March 13, 2018 07:55 AM
By: Reuters
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Illustration photo of the new 100 Israeli Shekel bill. December 31, 2017. Photo by Nati Shohat/Flash90Illustration photo of the new 100 Israeli Shekel bill. December 31, 2017. Photo by Nati Shohat/Flash90

Jerusalem - Israel’s parliament passed a law that limits the amount of cash in the economy in an effort to fight against dirty money, economic crime and money laundering.

Israel’s government loses “billions of shekels in revenue every year” because of under-the-table cash transactions, the Tax Authority said on Tuesday.

The World Bank in 2010 said Israel’s so-called shadow economy was equal to 22 percent of economic output. Israel produced about $366 billion in 2017, which would mean the economy loses out some $80 billion.

The new law imposes a limit of 11,000 shekels ($3,197) on cash transactions made to businesses, which could be further reduced by the finance minister 6,000 shekels in 2020. Cash deals between private individuals, such as buying a used car, will be limited to 50,000 shekels, a level that may be lowered to 15,000 shekels.

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Violators will receive warnings until the law goes into full effect in 2019, the Tax Authority said.

The law also states that checks will be limited to 10,000 shekels. Tourists will be limited to paying no more than 55,000 shekels to buy services or assets, although they can do so up to five times.



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Read Comments (6)  —  Post Yours »

1

 Mar 13, 2018 at 09:04 AM The Professor Says:

My goodness, how will the chevra in Bnei Brak and Meah Shearim survive? How will all the diamond and jewelry dealers make it? Does this mean that the kollels will have to pay their yungerleit by credit to a bank account? First the Zionim want all these people to serve in the army, and now they want them to pay taxes on earnings as well? I'm waiting for some oyber-chochom commentator to remark about how these new regulations were targeted only against frumme Yidden....

2

 Mar 13, 2018 at 09:07 AM georgeg Says:

Seems vague. So, hypothetically, if I in North America wanted to donate to an Israeli charity 11,000 shekels worth of money, does that mean I would need to write 2 cheques ("checks") to the institution?

3

 Mar 13, 2018 at 09:08 AM judith Says:

We should do that here if it works. Great idea.

4

 Mar 13, 2018 at 10:30 AM ELEPHANT Says:

How will they bribe the politicians??
Prime minster ?

5

 Mar 13, 2018 at 02:08 PM Geulah Says:

Reply to #3  
judith Says:

We should do that here if it works. Great idea.

We already do this here. Cash transactions over $10,000 have to be reported by financial institutions. If the tax authority determines you are taking cash to skip out on collecting sales tax there are fines and jail penalties. Writing multiple checks and then withdrawing the money will trigger the kiting warnings. Having it here helps very little and will do little in EY as well. Makes for a good story.

6

 Mar 13, 2018 at 02:09 PM judith Says:

Reply to #1  
The Professor Says:

My goodness, how will the chevra in Bnei Brak and Meah Shearim survive? How will all the diamond and jewelry dealers make it? Does this mean that the kollels will have to pay their yungerleit by credit to a bank account? First the Zionim want all these people to serve in the army, and now they want them to pay taxes on earnings as well? I'm waiting for some oyber-chochom commentator to remark about how these new regulations were targeted only against frumme Yidden....

I don't understand how enforcement will work. If cash is being hidden now, why won't it be able to be hidden later?

7

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