Israel Bans Cash Transactions Starting at $1,700 – Bitcoin Finance News


New legislation imposing stricter limits on payments in large amounts of cash will take effect in Israel on Monday. The goal, as stated by the country’s tax authority, is to improve the fight against organized crime, money laundering and tax evasion. Critics doubt that the law will achieve this.

Authorities in Israel go after cash purchases, set lower limits

Payments of large sums in cash and bank checks will be restricted in Israel through the amendments, which are due to take effect on August 1. Cash in the country, hoping to curb illegal activities such as illegal money laundering and non-compliance with taxes, the Jerusalem Post reported.

Under the new legislation, businesses will be required to use cashless methods for any transaction exceeding NIS 6,000 ($1,700), a marked decrease from the previous ceiling of NIS 11,000 ($3,200). The cash limit for individuals who are not registered as business owners will be 15,000 shekels (approximately $4,400).

Reducing the use of cash is the main goal of the law, according to Tamar Bracha, who is tasked with implementing the rules on behalf of the Israel Tax Authority. The Media Line news agency quoted the official as saying:

The goal is to reduce cash flow 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, the attorney representing clients in an appeal against the law filed in 2018, when it was first adopted, insists that the main problem is that the legislation is ineffective. Uri Goldman pointed to data showing that since the law’s initial implementation, the amount of cash has actually increased. The legal expert explained, noting other minuses:

When the bill was passed there were more than a million citizens without bank accounts in Israel. The law would prevent them from doing any work and would turn, in practice, 10% of the population into criminals.

Exempting trade with Palestinians from the West Bank and charities active in ultra-Orthodox communities have also sparked controversy. Dealing with large amounts of cash will be allowed in these cases, provided that the tax administration is accurately reported. Goldman believes this is unfair to the rest of society.

The Ministry of Finance also wants to limit private cash holdings

In its original draft, first proposed in 2015, the law also included a provision limiting private possession of large sums of cash to 50,000 shekels ($14,500). Although it was dropped at the time, the Israeli Finance Ministry now plans to reintroduce it and allow Parliament to decide whether to adopt it after the next elections.

Uri Goldman also believes that authorities should at least allow people to disclose and deposit their money into a bank account. This idea was proposed during the initial discussions on the legislation as well, but was never approved. Otherwise, the money will remain in circulation even if it is not used as before.

Meanwhile, the Bank of Israel has been exploring the option of issuing a digital shekel, another form of national deposit that is supposed to have cash-like features. The results published in May revealed that the majority of respondents in the public consultations conducted by the Monetary Authority were in favor of the plan.

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ban, monetary, israel, israeli, law, legislation, limits, money, money laundering, payments, restrictions, shekels, taxes, tax authority, tax evasion, taxes, taxes, transactions

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

Lubomir Tasev

Lubomir Tasev is an Eastern European technologist who likes to quote Hitchens: “Being a writer is what I am, not what I do.” Besides crypto, blockchain, and fintech, international politics and economics are two other sources of inspiration.

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