Sting operation nets NIS 21m. in unpaid taxes

“Evaders Pay,” - the 2012 campaign against tax evasion - yields NIS 21 million in sting operation.

Your Taxes_311 (photo credit: Thinkstock/Imagebank)
Your Taxes_311
(photo credit: Thinkstock/Imagebank)
The Israel Tax Authority and police netted NIS 21 million in unpaid taxes in a joint two-day sting operation targeting businesses in Tel Aviv, Ramat Gan and Bnei Brak this week.
“Evaders Pay,” the name the Tax Authority has given to its 2012 campaign against tax evasion, includes the participation of tax offices throughout the country, supported by tax collection, bookkeeping and investigation specialists.
This week’s operation was conducted by two teams: one concentrated on income-tax violations in the Ramat Gan business district, Tel Aviv’s Hatikva market and Bnei Brak; the other focused on value-added tax violations in South Tel Aviv and Jaffa.
The income tax team found that 15 percent of businesses did not record revenues, while another 15% made fundamental bookkeeping errors. Restaurants in the Bnei Brak area were the biggest culprits, with 28% not able to produce records of revenues and 18% found to have made errors.
Officials also arrested the head of a catering company servicing the Bnei Brak ultra-Orthodox community, who they suspect of concealing millions of shekels in revenues and of not reporting either his own or the company’s income. The man later admitted to recording fictitious 50% discounts in his books, even though he had charged his clients the full amount for the services.
The team investigating VAT-related violations reported that 62% of businesses had concealed various transactions.
The deliveries sector was the most serious offender, with 92% suspected of having made bookkeeping errors A human-resources company was suspected of failure to pay up to NIS 4m. in taxes. A hotel in South Tel Aviv that allows customers to book rooms by the hour (a form of accommodation usually used for conducting sexual activities) was also suspected of concealing a large amount of transactions from authorities.
Inspectors highlighted difficulties in two particular cases: the owner of a furniture store in Jaffa’s flea market fled when he saw them approaching; and the owner of a hairdressing salon in the Hatikva neighborhood threw projectiles at officials but cooperated after being restrained by police.