Israelis shunning NIS 200 bills due to abolishment fears

With the Israeli government considering scrapping the 200-shekel banknote to fight the black economy and tax evasion, some Israelis are reportedly already taking action. Although the Bank of Israel has poured cold water on the idea, saying that “no sufficiently well-founded professional justification has been provided,” there are reports of shop owners and businesses refusing to accept NIS 200 banknotes, and of… A significant increase in the number of Israelis changing the new shekel. 200 invoices in foreign currency.

Under the terms of the idea, the 200 shekel banknote will be canceled as legal tender within a short period of time, with its holders required to deposit it in banks. At the same time, a voluntary disclosure plan will be launched without filing any criminal case for tax evasion. Some economists have said such a move could net the Israeli tax authority as much as NIS 22 billion, although others say such projections are too optimistic.

Either way, some members of the public and businesses are already panicking. Over the past two days, a six-fold increase in demand for foreign currencies has been seen, Iran Ben Manda, vice president of operations and sales at global money transfer company GMT, told Globes. “Following the announcements of the government’s intention to cancel the 200 shekel note, we are facing tremendous demand from the public who want to convert shekel notes into foreign currencies. Many of the people who want to make the conversions are Israelis who stockpiled cash after the war.”

Although no decision has been made to cancel the bill, fear of this possibility appears on the ground in the refusal of some business owners to accept 200 shekel banknotes. For example, last Sunday, a customer of a bakery in the center of the country posted on his Facebook page that when he came to the checkout machine to pay with the blue bill, the cashier refused, claiming that the bill “may be fake.” He wrote in the same post: “This is a note I just took out of the bank, and it has no value. It’s a real shame and seems illegal to me. “You don’t have to be a genius to understand that.” That’s because they want this memo out of circulation. Another example from social media is a client who was asked to pay her pedicurist two bills of NIS 100 instead of one bill of NIS 200.

An anonymous source told Globes that their mother distributed a lot of 200 shekel banknotes to her adult children a few days ago and asked them to spend them before they were taken out of circulation.

According to Bank of Israel data, NIS 200 banknotes constitute approximately 80% of the value of cash held by the public. This money is not used for payments, but to hoard money, often as a means of evading taxes. According to a study by the European Central Bank based on data from 2008, one-third of the banknotes in the hands of the public were used for actual payments, and the rest as a means of hoarding money.

Published by Globes, Israel Business News – en.globes.co.il – on September 26, 2024.

© Copyright Globes Publisher Itonut (1983) Ltd., 2024.