"In a move that would not take long, it would be possible to give every Israeli, including tutors, gardeners, repairmen, and plumbers a terminal for electronic payments. But is this a necessary solution for combatting black capital? Absolutely not," VeriFone Holdings Inc. (Nasdaq: PAY) EVP and COO Lazy Yanay, the president of VeriFone Israel, told "Globes". VeriFone is a US multinational developer of electronic payment and clearing systems with over $2 billion in annual sales in 130 countries.
Last week, the cabinet approved the establishment of a team, chaired by Prime Minister's Office director general Harel Locker, to draw up a policy to reduce the use of cash. The team will examine the adoption of electronic payments to replace cash and checks in an attempt to fight black capital. .
Yanay says, "It is convenient for the government to ignore various kinds of black capital, such as a teacher who earns NIS 5,000 a month and whose husband earns NIS 6,000, and to make ends meet, offers private lessons in the evening. Hundreds of new income tax inspectors will target her? Will economic salvation come from NIS 300 in taxes collected from this teacher? It's a joke."
Prime Minister Benjamin Netanyahu is leading the reform in the means of payment in Israel. The Prime Minister's Bureau says that with the adoption of the team's recommendations, which will be ready in a few months, "Israel will lead a breakthrough in electronic payments." It added that the measure would reduce the black economy and increase the government's tax revenues.
"For a company like VeriFone, which is engaged in the field of clearing systems, this will cause no material movement of the sales and profitability needle," says Yanay. "The problem with the cabinet decision is that if the Locker team's recommendations are inconvenient to politicians, they will not be implemented and they will vanish. On this matter, it would have been better to act in the long term, but politicians will look at the short term, since only a few in Israeli politics have the motive to look years down the road. The real battle against black capital - will not come by making bank notes vanish."
Published by Globes [online], Israel business news - www.globes-online.com - on September 22, 2013
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