update deskIsrael News

Bank of Israel rejects proposal to cancel 200-shekel bill

The government had not presented a "sufficiently established professional justification" for the measure, proposed as a means to combat tax evasion, according to the Bank of Israel.

A 200 shekel bill, Feb. 7, 2016. Photo by Nati Shohat/Flash90.
A 200 shekel bill, Feb. 7, 2016. Photo by Nati Shohat/Flash90.

The Bank of Israel has no intention of canceling the 200-shekel bill, according to a Thursday press release. 

The release came in response to a directive issued last week by Israeli Prime Minister Benjamin Netanyahu during a meeting of the Knesset subcommittee on advancing the fight against crime in the Arab sector. The Israeli premier directed the committee members to jointly examine the possibility of abolishing Israel’s highest-denomination banknote. Members included Finance Minister Bezalel Smotrich, Bank of Israel Governor Amir Yaron, Prime Minister’s Office Director-General Yossi Shelley, the Tax Authority and the PMO staff.

According to the PMO, this directive was part of a fight against “black money”—non-declared income. 

According to the central bank’s statement on Thursday, “No sufficiently established professional justification to cancel any banknote has been presented to the Governor [of the Bank of Israel].”

Therefore, the governor “does not intend to use his authority to work toward canceling any banknote or to change the mix of banknotes in circulation.”

According to a report in Israeli business daily Globes, the premier’s investigation into the issue of 200-shekel banknotes was influenced by a proposal submitted to the Finance Ministry in early September by several high-ranking businesspeople and former senior government officials. These included Hisunim Finance chairman Adam Reuter, Udi Levi, former head of Mossad’s Economic Warfare Division, former Israel Securities Authority chairman Moshe Terri, engineer and entrepreneur Nurit Zeevi and Eyal Ofer, an expert in money transfers in black economies.

The proposal claimed that a significant portion of cash accumulated in 200-shekel bills is used to evade taxes, and that discontinuing the bills would disincentivize tax evaders. 

“In a modern country where there is a strong banking infrastructure, there is no reason for a business owner to hold a lot of cash because it makes him an easy target for robbery,” said Reuter, according to Globes. “The [business owner] who has evaded taxes until now will be forced to stop hoarding cash and will have both a stick and a carrot to start paying taxes.”

According to the Globes report, the proposal included several other ways to prevent citizens from hoarding capital, such as using artificial intelligence tools to track illegal financial activity and banning the large-scale use of cash substitutes, such as precious metals.

You have read 3 articles this month.
Register to receive full access to JNS.

Just before you scroll on...

Israel is at war. JNS is combating the stream of misinformation on Israel with real, honest and factual reporting. In order to deliver this in-depth, unbiased coverage of Israel and the Jewish world, we rely on readers like you. The support you provide allows our journalists to deliver the truth, free from bias and hidden agendas. Can we count on your support? Every contribution, big or small, helps JNS.org remain a trusted source of news you can rely on.

Become a part of our mission by donating today
Topics
Comments
Thank you. You are a loyal JNS Reader.
You have read more than 10 articles this month.
Please register for full access to continue reading and post comments.
Never miss a thing
Get the best stories faster with JNS breaking news updates