Tax Authority Raids Find Widespread Income Non-Reporting

A recent sweep by the Israel Tax Authority's National Unit for Bookkeeping Management uncovered that 93 out of 161 businesses inspected in northern and Sharon regions failed to report income, amounting to approximately 57% of those checked. The operations, which took place in areas including Tiberias, Karmiel, the Golan Heights, Afula, Nazareth, Netanya, and Haifa, aimed to ensure businesses comply with bookkeeping regulations, report sales, and adhere to the law limiting cash transactions.

Beyond income non-reporting, numerous violations of the cash law were discovered. Inspectors conducted preliminary surveillance and test purchases before returning to businesses to verify if transactions were recorded. In Haifa's markets, most stalls did not report income, and some businesses improperly used bookkeeping leniencies not approved for them. In the Sakhnin area, 90% of inspections revealed income non-reporting or improper bookkeeping.

Specific cases included a butcher in Arraba where a prior test purchase was not recorded, with the owner claiming he had just opened. A clothing store also failed to record a purchase, with the owner citing inexperience. A wholesaler in Tayibe, marketing on TikTok, was found to have not reported tens of thousands of shekels in income. A garage in the Golan Heights had 136,000 shekels in unrecorded customer payments, with the owner citing business debts.

In the Sharon region, over 60% of businesses in Netanya and its surroundings failed to report income, with payments received via bank transfers, payment apps, and cash, indicating that digital payments alone do not guarantee reporting. These operations are part of an intensified enforcement campaign by the Tax Authority over recent months, including night operations and meetings with businesses nationwide regarding debts and missing reports.

The law restricting cash use, enacted in January 2019 and tightened in 2022, limits cash transactions to 6,000 shekels for businesses and 15,000 shekels for private transactions. Exceeding these limits incurs financial penalties. Failure to report income is more serious, potentially leading to tax assessments based on the authority's estimation rather than submitted reports, and in severe cases, criminal proceedings. The Tax Authority stated it will continue these operations nationwide to combat the black market and tax evasion.