A new amendment to Israel’s economic arrangements bill classifies all tax evasion as money laundering.
Despite opposition in recent years and the fact that the current Economic Arrangements bill was supposed to be very limited, the Israel Tax Authority has managed to insert several dramatic legislative amendments aimed at combating illegal capital.
The news from the Tax Authority and the Ministry of Finance on taxation is that taxes are not being raised, but collection from aggressive tax planners is becoming more thorough in an escalation of the war on illegal capital and money laundering. “That’s where the state treasury will get the money it needs,” Ministry of Finance sources say.
Among other things, the recent draft Economic Arrangements bill, which “Globes” has obtained (as of web posting, no final version of the taxation section of the Economic Arrangements bill has been distributed yet), contains an amendment stating that tax violations committed with fraudulent intent (violations under Section 220 of the Income Tax Ordinance) shall be considered predicate offenses under the Prohibition on Money Laundering Law). A predicate offense is an act from which tainted capital (trafficking in weapons, drugs, or women; extortion; etc.) is accumulated.
The meaning of the change is that tax evaders can be accused of under the criminal provisions for money laundering, which carry a more severe penalty (10 years imprisonment, instead of seven).