According to PANews, a report by Israel's National Auditor, Matanyahu Englman, highlights significant shortcomings in the country's efforts to collect taxes from the cryptocurrency market. The report, as cited by the Israeli publication 'Globes,' reveals that the Israeli Tax Authority has failed to implement effective measures to tax cryptocurrency transactions, resulting in an estimated loss of around 3 billion new shekels (approximately $800 million) in potential tax revenue.
The findings indicate that between 2018 and 2022, the tax authority received only about 500 reports of cryptocurrency transactions annually, despite the possibility of up to 200,000 individuals holding cryptocurrency wallets in the country. This results in a tax reporting rate of merely 0.25%. Englman stresses the importance of revisiting the cryptocurrency tax policy, especially in light of the increasing national debt due to heightened war and security demands. He suggests that the government should explore ways to enhance tax collection from the cryptocurrency sector to prevent additional tax burdens on the general population.
Since 2018, the Israeli Tax Authority has issued only three public statements regarding cryptocurrency taxation and has not updated its tax regulations to reflect changes in the market. This lack of proactive measures and adaptation to the evolving cryptocurrency landscape has contributed to the substantial gap in tax collection, as highlighted in the report. The auditor's findings underscore the need for a more robust and responsive approach to cryptocurrency taxation to ensure that the government can capitalize on this growing financial sector without imposing undue pressure on taxpayers.