An Israeli law that comes into effect on Monday limits cash payments in a business transaction to 6,000 new shekels ($1,785), as the country cracks down on organized crime, money laundering and tax evasion.
The law, which was introduced by the Israel Tax Authority last week, requires any payment to a business over NIS 6,000 to be made through other means such as digital transfer or a debit card. People who are not listed as business owners can use up to NIS 15,000 in cash to trade, Xinhua News Agency reported.
Previously, the maximum amount of cash that could be used in a business transaction was NIS 11,000.
According to a statement released by the Israel Tax Authority, restrictions on the use of cash do not apply to money transfers between family members, with the exception of rent payments for which the maximum amount has been set. reduced from NIS 50,000 to NIS 15,000.
Analysts believe the law will require people to pay with digital methods rather than cash so transactions can be easily tracked. Cash payment limitations are intended to curb tax evasion, black market activity and even terrorist operations.
Uri Goldman, an expert on international taxation, economic crime and the prohibition of money laundering, told Israeli media that the law mainly affects people such as plumbers and handymen, as well as small property owners.
Lowering the cap on cash payments “would have a significant impact on those selling products like electrical appliances and furniture”, he said.
Heavy fines are imposed on violators of the law, starting at 15% for cash payments under NIS 25,000, rising to 20% for payments between NIS 25,000 and 50,000, and reaching 30% for larger payments. according to the Israel Tax Authority.
Ultra-Orthodox Jewish charitable funds that give and receive cash are exempt from the law. The application of the law is currently not applicable to non-Israelis in the West Bank and Gaza Strip and to Israeli citizens who give or receive money to or from non-Israeli residents in the two regions.
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