New law limits cash deals to fight economic crimes

The Knesset passed a law that limits the amount of cash in the economy in an effort to fight against dirty money, economic crime and money laundering.

The government loses “billions of shekels in revenue every year” because of underthe-table cash transactions, the Tax Authority said on Tuesday.

The World Bank in 2010 said Israel’s so-called shadow economy was equal to 22% of output. Israel produced about $366 billion in 2017, which would mean the taxable economy loses out some $80b.

The new law imposes a limit of NIS 11,000 ($3,197) on cash transactions made to businesses, which could be further reduced by the finance minister to NIS 6,000 in 2020. Cash deals between private individuals, such as buying a used car, will be limited to NIS 50,000, a level that may be lowered to NIS 15,000.

Violators will receive warnings until the law goes into full effect in 2019, the Tax Authority said.

The law also states that checks will be limited to NIS 10,000. Tourists will be limited to paying no more than NIS 55,000 to buy services or assets, although they can do so up to five times. (Reuters)