At the annual tax conference of the Tax Advisers Chamber, which opened in Eilat, Tax Authority Director Adv. Shay Aharonovitz presented a particularly grim forecast for the coming years, emphasizing the need for drastic measures in the fight against the black economy and the cancellation of banknotes.
"I will tell you what the 2027-2028 budget will look like, a brutal budget; there is no sign that exceptional growth is going to happen," Aharonovitz said on a panel. "We continue to fight on seven fronts... a NIS 200 billion defense budget not only in 2027 but also in 2028... but we will have to cancel some of the cash. Bank of Israel opposes canceling a NIS 200 note, we saw what happened with the mayor of Kfar Saba. We will have to cancel all the 200s, the 200 and maybe cash altogether. We will have to take hard measures."
Aharonovitz went on to emphasize the economic potential of this step and the stance of the Bank of Israel: "There is a dispute between us and the Bank of Israel. I am telling you that if the use of cash in Israel is canceled tomorrow morning, it could bring in collections of NIS 20-30 billion; the Bank of Israel opposes this."
The Bank of Israel: 'No professional basis justifying the cancellation of any given banknote has been presented to the Governor'
Tax Advisers Chamber President Yaron Gindy addressed the issue of collection and regulation in his remarks: "How do you get more money? Lower the bureaucracy, there will be more money. Everywhere in the Israeli economy, in housing, in all government ministries, every regulator puts down their heavy hand. And if we want there to be growth—how did you say? You're short 20 billion, bring in just 30 billion from regulation."
The Bank of Israel stated that "The Bank of Israel finds it appropriate to make it known to the public that the authority to cancel banknotes according to law rests with the Governor of the Bank of Israel. To date, no professional basis justifying the cancellation of any given banknote has been presented to the Governor. In no country in the world has cash been canceled wholesale. Therefore, the Governor of the Bank of Israel does not intend to exercise his authority and act to cancel any banknote or to change the mix of banknotes in circulation."