Israel bans cash offers for amounts starting as low as $1,700 – Finance Bitcoin News

Israel bans cash offers for amounts starting as low as ,700 – Finance Bitcoin News
Israel bans cash offers for amounts starting as low as ,700 – Finance Bitcoin News

New legislation introducing tighter restrictions on large cash payments will come into force in Israel on Monday. The aim, as stated by the country’s tax authority, is to improve the fight against organized crime, money laundering and tax evasion. Critics doubt the law will achieve that.

Authorities in Israel go after cash purchases, introduce lower limits

Payments of large sums of money in cash and bank checks will be further restricted in Israel by changes to come into force on 1 August. Tax authorities want to further reduce the circulation of cash in the country, and thus hope to curb illegal activities such as money laundering and tax non-compliance, the Jerusalem Post reported.

Under the new legislation, companies will be required to use non-cash methods for any transaction exceeding 6,000 shekels ($1,700), a noticeable decrease from the previous cap of 11,000 shekels ($3,200). The cash limit for individuals who are not registered as business owners will be 15,000 shekels (close to $4,400).

Reducing the use of cash is the main purpose of the law, according to Tamar Bracha, who is tasked with implementing the rules on behalf of the Israel Tax Authority. Quoted by Media Line news, the official elaborated:

The aim is to reduce the flow of cash in the market, mainly because criminal organizations tend to rely on cash. By limiting its use, criminal activity is much more difficult to carry out.

However, a lawyer representing clients in an appeal against the law filed in 2018, when it was first passed, insists that the main problem is that the legislation is not effective. Uri Goldman pointed to data showing that since the law was first introduced, the amount of cash has actually increased. The legal expert pointed to another of its disadvantages and further explained:

When the bill passed, there were over a million residents without bank accounts in Israel. The law would prevent them from doing any business and would effectively turn 10% of the population into criminals.

An exception for trade with Palestinians from the West Bank and charities active in the ultra-Orthodox circles has also sparked controversy. Trading with large amounts of cash will be permitted in these cases, provided that they are thoroughly reported to the tax authorities. Goldman believes this is unfair to the rest of society.

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The Ministry of Finance also wants to limit private cash holdings

In the original draft, first proposed in 2015, the law also contained a provision limiting private holdings of large sums of cash to 50,000 shekels ($14,500). Although it was shelved at the time, Israel’s Finance Ministry now plans to reinstate it and let parliament decide whether to adopt it after the upcoming elections.

Uri Goldman also believes that the government should at least allow people to hand over their cash and deposit it into a bank account. That idea was also proposed during preliminary discussions of the legislation, but was never approved. Otherwise, cash will remain in circulation even if it is not used as before, he noted.

Meanwhile, the Bank of Israel has been exploring the possibility of issuing a digital shekel, another form of national fiat that will have cash-like functions. The majority of respondents to public hearings conducted by the monetary authority have supported the plan, the results published in May revealed.

Tags in this story

ban, cash, israel, israeli, law, legislation, borders, money, money laundering, payments, restrictions, shekel, tax, tax authority, tax evasion, tax, taxes, transactions

Do you think the new law will limit the use of cash in Israel? Share your expectations in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’ quote: “To be a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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