Israel Prohibits Cash Deals for Amounts Starting as Low as $1,700 – Finance Bitcoin News

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Israel Prohibits Cash Deals for Amounts Starting as Low as ,700 – Finance Bitcoin News
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New legislation imposing tougher restrictions on large cash payments will go into effect in Israel on Monday. As stated by the country’s tax authority, the goal is to intensify the fight against organised crime, money laundering and tax evasion. Critics doubt that the law can achieve that goal.

Israeli authorities pursue cash purchases, introduce floor

Israel’s amendment, which will go into effect on August 1, will further restrict the payment of large sums in cash and bank checks. Tax officials hope to curb illegal activities such as money laundering and non-compliance with tax rules, according to the Jerusalem Post, as they want to further reduce the flow of cash in the country.

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

Tamar Bracha, who enforces the rules on behalf of the Israel Tax Authority, said reducing the use of cash is the main purpose of the law. Media Line news outlet quoted the official as saying:

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

However, a lawyer representing a client appealing against the law, which was first passed in 2018, insists that the main problem is the inefficiency of the legislation. The figures cited by Uri Goldman show that the amount of cash has actually increased since the law was first introduced. Pointing out another disadvantage, the legal expert further explained:

When the bill was passed, more than a million citizens of Israel were unbanked. The law will prevent them from doing any business, effectively turning 10% of the population into criminals.

Exemptions for trade with Palestinians in the West Bank and charities active in ultra-Orthodox communities have also sparked controversy. In these cases, large cash transactions can be made as long as they are thoroughly reported to the tax authorities. Goldman Sachs believes this is unfair to the rest of society.

Treasury also wants to limit private cash holdings

In the original draft, first presented in 2015, the law also included a provision that would limit privately held large sums of cash to 50,000 shekels ($14,500). Although abandoned at the time, Israel’s Ministry of Finance now plans to reintroduce it and let parliament decide whether to adopt it after upcoming elections.

Uri Goldman also believes that authorities should at least allow people to declare cash and deposit it in bank accounts. The idea was also floated during preliminary discussions on the legislation, but was never approved. Otherwise, he noted, cash would continue to flow even if it wasn’t used as it was before.

Meanwhile, the Bank of Israel has been exploring options for issuing a digital shekel, another form of national legal tender that should have cash-like characteristics. Results published in May showed that a majority of respondents to a public consultation conducted by monetary authorities supported the plan.

tags in this story

ban, cash, israel, israel, law, legislation, restriction, money, money laundering, payment, restriction, shekel, tax, tax office, tax evasion, taxes, taxes, transaction

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

Lubomir Tasev

Lubomir Tassev, a journalist from tech-savvy Eastern Europe, likes Hitchens’ famous quote: “Being a writer is who I am, not what I do.” Beyond crypto, blockchain and fintech, international politics and The economy is two other sources of inspiration.

Image credits: Shutterstock, Pixabay, Wiki Commons

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