⚡ 99.75% of Crypto Investors in Israel Don’t Pay Taxes
posted 6 Nov 2024
According to the state comptroller, Israel is losing substantial revenue due to an ineffective tax system for cryptocurrency transactions. Between 2018 and 2022, the country could have collected an additional $250 million annually by taxing digital asset users.
Among the estimated 200,000 crypto users, only 0.25% reported cryptocurrency-related income during this period. In response, the Israel Tax Authority (ITA) introduced a simplified tax payment system at the beginning of 2024.
Officials launched a new mechanism allowing direct transfers to bank accounts, but the initiative has seen limited uptake. As is often the case, most users are uninterested in paying taxes or joining the program, even with the simplified process.
Many countries, including Ukraine, are losing revenue due to the lack of an effective infrastructure for taxing cryptocurrency activities. The focus should be on digitalizing payments and reducing rates rather than solely on enforcement,commented GN Crypto analyst Anton Kryshtal.
Analysts also note that Israel has not yet joined the international financial information exchange program. As a result, tax authorities cannot access data on Israeli citizens’ foreign accounts, increasing risks associated with international tax evasion.
The report also calls on the Bank of Israel to collaborate more closely with tax authorities to establish a more accessible and transparent tax system for all digital asset-related activities, including stronger anti-money laundering measures.
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