Do you want to withdraw up to NIS 7,000 from an old provident fund? You will not have to pay tax: a proposal by Minister of Finance Yair Lapid to allow savers in provident funds with up to NIS 7,000 to withdraw the money without paying taxes was passed by the Knesset Labor, Welfare and Health Committee today.
By the end of March, provident funds will notify savers about their right to withdraw their money and the instructions on how to do so.
In September 2013, the Knesset Finance Committee approved regulations to allow the withdrawal of money accumulated in accounts until 2007. The Labor, Welfare and Health Committee, chaired by MK Haim Katz (Likud), extended the option to withdraw money from accounts in which money accumulated through 2011.
According to the Ministry of Finance, there are almost three million old inactive accounts with small balances. These accounts amount to over 40% of total provident fund accounts, but just 2% of the money managed by provident funds.
"This is good news that will allow savers to receive their money immediately without paying tax. We will continue to do everything we can to help the Israeli middle class," said Lapid.
Supervisor of the Capital Markets, Insurance, and Savings Dorit Salinger added, "This is another measure to make the pension savings system more efficient that will benefit savers."
Published by Globes [online], Israel business news - www.globes-online.com - on February 24, 2014
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