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Israel’s government is bolstering its strategies in the fight against tax evasion and money laundering. A report unveiled this news earlier today, citing a new draft bill published by the country’s Finance Ministry. Reportedly, the draft highlights measures that the government should implement to better combat black capital. Among the proposed actions is putting crypto users under a microscope.
Under the proposed law, it will be mandatory for citizens that either owe or have purchased digital assets worth more than $61,000.00 (£43,700.10) to file a report with the Israel Tax Authority. Reportedly, this requirement would apply to any Israeli citizen that holds crypto worth the aforementioned amount either personally or on behalf of a child under 18 years. The bill notes that anyone within this bracket must report to the tax agency even if they only held the funds for a day.
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According to the bill, virtual currencies have become common among the country’s citizens. The bill added that digital currencies are subdivided into small units that are easily transferable by electronic means. Seeing as they do not fall under the scope of inspection or surveillance, they have become an efficient and convenient way for people to conceal income, amassing undisclosed assets, and even money laundering.
A chance for the government to rake in $9.2 million annually
Reportedly, the approval of this bill would see the Israeli government net an additional $9.20 million (£6.59 million) in taxes in the coming year. However, the country’s crypto community is not for the idea. Meni Rosenfeld, the chairman of the Israeli Bitcoin Association, allegedly, penned a letter to the tax authority, saying such a rule would result in the creation of a database comprising crypto adopters. This would be outrageous, seeing as the government does not have similar records of people that have invested in other assets.
Rosenfeld further noted that the price volatility of cryptocurrencies such as Bitcoin (BTC/USD) would make reporting on such assets difficult. This is because the wild price swings could see investors surge past $61,000.00 (£43,700.10) within a month before plunging below the threshold soon afterward.
On top of this, he believes the Finance Ministry’s decision to swiftly amend the current law without going over the details with industry experts is an infringement of investor rights to a hearing. He added that this haste would only compromise the effectiveness of the proposed legislation.