"Fictitious invoices are a national plague. We're talking about tens of billions, or least a good many billions. In every case which we catch, we see almost NIS 1-2 billion. People issue fictitious invoices without conscience and without limits, and we see this in a range of our cases at VAT and Income Tax," said Israel Tax Authority director general Moshe Asher at the Institute of Certified Public Accountants in Israel's annual conference in Eilat this morning.
"A large part of our investigative work deals with fictitious invoices, both with the police and independently, there are a great many cases in the pipeline. It's a national plague, which must be dramatically reduced," Asher added.
Another tool which Asher mentioned in the war against fictitious invoices is online VAT. "One of the tools we've used in recent years to deal with this is online VAT, but at the moment, this applies to businesses with a turnover of more than NIS 2 billion. We're trying to expand the businesses which will be required to report VAT online," he said.
Asher added that the Tax Authority's policy in the coming years and a directive require tighter collection and enforcement as part of the war against black capital. "We will create the legal infrastructure and authority to act on these issues, and we will also seek to hire hundreds of new employees for the Tax Authority," he said. "There are already discussions about this with the Ministry of Finance, and in the next few days, the issue will be closed in the 2013-14 budget, and hundreds of employees will be added to the Tax Authority to deal more effectively with black capital."
As for the legislative amendments needed to fight black capital, Asher said two of the amendments were critical. "Money changers roll over huge sums, and these entities have become launderers of black capital. We'll act to tighten the reporting on large amounts and to cross reference the information obtained to identify suspect businesses. The second issue is to make tax offences a source offense in the Prohibition of Money Laundering Law. According to Israel Money Laundering and Terror Financing Prohibition Authority reports, there are more than NIS 1 billion in suspect transactions, the tax aspect of which should be examined, but at the moment, the Tax Authority is not exposed to information because tax offenses are not a source offense."
Published by Globes [online], Israel business news - www.globes-online.com - on July 1, 2013
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