State Comptroller: Tax Authority missed NIS 3b from crypto

The state is not working effectively to access the billions of shekels invested in the cryptocurrency market and could have collected 3 billion shekels in taxes for the coffers of the Ministry of Finance. In his report, State Comptroller Matanyahu Engelman accused the tax authority of not taking most of the necessary steps to improve its ability to collect taxes, at a time when the debt burden on Israel is increasing due to war and security needs. The State Comptroller stressed the need to study how taxes are collected from the cryptocurrency market, before the government raises taxes on the public.

The State Comptroller examined the issue for the period 2018-2022, and found that during this period only 500 reports were registered on average per year to the tax authority about activities on the cryptocurrency market, out of a possible presence of about 200,000 cryptocurrency wallet owners – so that Only 0.25% of transactions are reported to the IRS. This is the lowest among the various estimates, while the maximum estimate of the State Comptroller brings the number of cryptocurrency wallet owners to about 1.7 million.

The report shows that since 2018, the IRS has issued only three publications on the subject of taxation in the cryptocurrency market, and has not bothered to update the rules it has published. Consequently, the necessary adjustments were not made, despite the significant developments witnessed by the market.

Published by Globes, Israel Business News – en.globes.co.il – on November 5, 2024.

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