NIS 8.6 billion reported through voluntary tax disclosure scheme
In September of 2014, the authority launched a voluntary disclosure procedure that would allow Israelis who had failed to report path to come clean without facing criminal charges.
By NIV ELISUpdated: SEPTEMBER 5, 2016 23:27Man at an ATM in Israel (photo credit: MARC ISRAEL SELLEM)
With just a few months left until its amnesty program ends, the Israel Tax Authority has managed to uncover NIS 8.6 billion worth of unreported taxable money.In September 2014, the ITA launched a voluntary disclosure procedure to give Israelis who failed to report income or wealth in previous tax years, a way to come clean without facing criminal charges.The hope was that Israelis who had not reported large sums of money would confess and pay their back taxes instead of keeping that money off the books.The authority offered two options for reporting. The first allowed initial anonymity in order for citizens a chance to assess their back tax bills. If they moved forward with voluntary disclosure, their name would eventually, of course, be uncovered.The second was a fast-track, for cases where the sums in question were under NIS 2 million and tax bills under NIS 500,000.As of this week, according to data provided by the ITA, some NIS 8.6 billion worth of capital was revealed in 5,513 disclosure requests. The vast majority of requests – 59 percent – began with the anonymous option. The rest were evenly split, with about 20% going through the regular option and 21% through the fast-track.The success of the program has raised the question of how much longer the ITA should continue offering the program, which is due to expire on the last day of 2016.The tax amnesty has already been extended twice, first in June 2015 and again this past June.On the one hand, continuation of the program has allowed more funds to be reported and more taxes to be collected. On the other, keeping a short window of opportunity open forever could encourage bad behavior in the future.“Why pay up now if I can just get out of it later?” a potential tax evader might think.According to an ITA spokeswoman, there is no decision yet whether to offer another extension.