A new law is set to take effect in Israel starting August 1 that will ban payments of large sums of money in cash and bank checks. The goal of the reform, according to a statement issued by Israel’s Tax Authority, is to fight organized crime, money laundering and tax non-compliance.
Under the new law, any payment to a business above 6,000 NIS ($1,700) must be made using alternative methods, such as a digital transfer or a debit card. Trading between private citizens who are not listed as business owners will be limited to 15,000 NIS ($4,360) in cash. This is another step in Israel’s fight against the use of cash. Previously, cash up to the amount of 11,000 NIS ($3,200) could be used in business deals.
“The goal is to reduce cash fluidity in the market, mainly because crime organizations tend to rely on cash. By limiting the use of it, criminal activity is much harder to carry out.”
Tamar Bracha
For that to happen, there must be less cash in the market.
Uri Goldman, an attorney who represented clients in an appeal against the law in 2018, claims the main problem with the law is that it is simply not efficient.
“We were in the discussions about the bill. The data we brought showed that since the first phase of the law was in effect, the amount of cash on the market only increased. So clearly, something’s not working,” Goldman told The Media Line.
People walk outside the Tax Authorities offices in Jerusalem on July 27, 2022 (credit: OLIVIER FITOUSSI/FLASH90)Goldman also explained the downside of the law. “When the bill passed there were over a million citizens without bank accounts in Israel. The law would prevent them from conducting any business and would, practically, turn 10% of the population into criminals,” he said.
Article: Israel bans use of cash for purchases larger than NIS 6,000