developing· Politics· Updated
Israel Tax Authority Chief Proposes Eliminating NIS 200 Bill, Cash Use
The Director of the Tax Authority, Shai Aharonovich, proposed the elimination of the NIS 200 banknote and potentially all cash transactions in Israel to combat the black market and tax evasion. Speaking on Monday, October 19, 2026, at the annual Tax Consultants Association conference in Eilat, Aharonovich warned of "cruel" budgets for 2027 and 2028, driven by defense spending that could reach NIS 200 billion annually due to security challenges, including conflict with Iran.
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What happened
- 01Tax Authority Director Shai Aharonovich proposed eliminating the NIS 200 banknote and potentially banning all cash transactions in Israel.
- 02Aharonovich estimated that a complete ban on cash could generate NIS 20 billion to NIS 30 billion in annual tax revenue.
- 03The Bank of Israel opposes the proposal, stating there is no professional justification for removing the NIS 200 banknote.
- 04Aharonovich warned of "cruel" budgets for 2027 and 2028, with defense spending projected to reach NIS 200 billion annually.
- 05The Tax Authority is considering alternative measures, such as raising the "trapped profits" distribution rate from 6% to 8%.
- 06Reinstating a property tax on vacant land is also being explored by the Tax Authority to boost state revenues.
- 07Tax Consultants Association President Yaron Gindi suggested that lowering bureaucracy would help increase state revenue collection.
Aharonovich estimated that a complete ban on cash payments could generate between NIS 20 billion and NIS 30 billion in annual tax revenue, which could help the state avoid other painful economic measures. He cited police investigations, including a case involving the mayor of Kfar Saba, as evidence of the prevalence of illicit cash transactions. However, the Bank of Israel opposes the elimination of the NIS 200 banknote, having previously stated that there is no professional justification for the move.
To address the state's significant financial needs, the Tax Authority is exploring other targeted measures to increase revenue without broadly burdening the public. These include tightening the "trapped profits" reform by increasing the distribution rate from 6% to 8%, and potentially reinstating a property tax on vacant land. Meanwhile, the President of the Tax Consultants Association, Yaron Gindi, suggested that reducing bureaucracy could also boost state revenues.
Summarized by baba from the reports of 8 newsrooms. Updated
Latest report: Arutz Sheva. Read Arutz Sheva’s original
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Israel Tax Authority Chief Proposes Eliminating NIS 200 Bill, Cash Use
