Saturday, 31 May 2014
No Cash Please
Did you know that 23% of Israel's economy is black market?
For comparison, according to Globes, developed Western economies are around 10% black-market.
This huge amount of black market money means the State of Israel is losing out on 30-40 BILLION shekels of tax revenue each year.
Adding these missing funds to the budget would significantly increase Defence, Education, Health, Transport and many other aspects of Israel's national needs.
Also, in light of high-profile recent bribery and corruption scandals in Israel, the use of large sums of cash has been a back-door for crime and corruption.
According to a new proposal from the Harel Locker Committee on financial reform, the use of cash will be limited for business transactions to 7500 NIS, and later further restricted to 5000 NIS.
Private individuals will be limited to 15,000 NIS cash spending.
For individuals, I can think of buying cars, apartments, weddings/simches - as some of the few transactions which would be impacted by the new regulations.
I think the new measures sound reasonable and indeed very beneficial to the government and public.
Perhaps it is time for Israel to set a globally-pioneering path for removing cash from the economy altogether.
Once untraceable-cash is out of the equation, black marketeers and criminals will be much more limited in their day-to-day business.
Credit and debit cards (which don't currently exist in Israel, and are also recommended by the committee), e-commerce, checks and bank transfers should give quite enough options for getting rid of venerable coins and bank notes.