(photo credit: Thinkstock/Imagebank)
If you want praise and your job is taxing other people, you may have to make do
On March 14 the Israeli Tax Authority (ITA) announced
on its website that it has just received an award for excellence in efficiency
and bureaucracy-reduction from the Israel’s Civil Service Commission. In
addition, the Customs Authority recently received a national prize for quality
and excellence. Doron Arbeli, acting director of the ITA, said these prizes show
the constant striving for excellence and efficiency at the ITA.
section of the ITA which received the awards is called the Client Service
Division. Taxpayers are considered to be “clients.” The division, headed by Yael
Shavit, acts to rationalize and improve work practices, by, among other things,
locating bottle-necks and dealing with them. It also improves turnaround times
using online techniques.
Consequently, achievements cited in the above
award to the ITA included: Reducing the burden for applicants to the ITA’s
department; improving the service and preventing pressure on applicants who
hitherto had to wait in long queues; and cost efficiencies.
There are now
telephone-help lines overseen by the ITA management which facilitate
“measurement and achievement of clear achievable goals, giving prompt and good
answers to clients, reduction of bureaucratic processes and simpler
The award to the Customs Authority was for the work of its
Investigations Division. Since 2005, it has applied the concept of “power
multiplication” to deal with serious offenses. This apparently included
improvements in work procedures and cooperation with other organizations (i.e.
not reinventing the wheel).As a tax practitioner, a few comments come to
The improved efficiency of the Tax Authority is commendable. But it is to
be expected, as it is largely thanks to technological progress. Only a caveman
might find it hard to improve.
There has been an improvement in service
on the technological side. And it has been matched by a friendlier attitude from
many officials. I recently had a good chat with a Tel-Aviv tax collector about
the merits of the Pink Floyd rock group, and got what I needed for my
Nevertheless, filing CPA registrations and annual tax returns is
a duplicative and wasteful process. First you enter details online, then you
print it all out on paper, get it signed, and file the paper version again with
Even if the ITAS sometimes needs supporting documents (for
example, confirmations of tax withheld from salaries and investment income,
pension contribution, etc.), why can’t the documents be uploaded and filed
online with the relevant return? Another area to watch out for on online tax
returns and resulting tax assessments relates to foreign tax credits.
example, if an Israeli resident claims a credit for US tax on US investment
income, the ITA’s online system applies strictly the foreign tax credit tax
rules and limitations in the USIsrael tax treaty and the Israeli Income Tax
Ordinance – but without showing you how.
In one case, it emerged the
ITA’s online system had aggregated the income of the husband and wife resulting
in a reduced foreign-tax credit. This was eventually remedied.
social security side, it is two steps forward, one step back. The National
Insurance Institute maintains a totally different online system from the ITA, so
it is vital to remember the separate functions and commands. And transparency is
weak – it is isn’t always easy to understand how their system arrived at its
figures for amounts paid, and those still due.
Sometimes the bureaucracy
can be understandable. Recently, a husband with a wife who was eight-months
pregnant realized they may not get full maternity pay from the National
Insurance Institute after the birth because the wife’s business wasn’t
registered for tax and national insurance purposes.
He tried to back-date
the start of his wife’s business and pay a few thousand shekels in national
insurance, with a view to receiving many thousands of shekels as maternity pay
after the birth.
The National Insurance Institute had a number of
questions for the couple, and so did the ITA...
Readers are invited to
send me their comments on the efficiency of the Israeli Tax Authority and the
National Insurance Institute. If the comments are fit for a family audience,
we’ll try to air them.
As always, consult experienced tax advisers in
each country at an early stage in specific cases.
Harris is a certified public accountant and tax specialist at Harris Consulting
& Tax Ltd.