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Comptroller: ‘Ill-informed Israelis overpay billions in tax’

Israel’s State Comptroller Matanyahu Englman found that Israelis overpay billions of shekels in taxes annually because they are ill-informed about their tax entitlements.

The report said, “The audit found that the Tax Authority does not fully initiate providing details about rights to those who are entitled to them.”

In particular the report cites tax incentives on pension savings, and on retirement, which are frequently not realized due to their complexity.

This was a point that was made in the State Comptroller’s previous report on the matter and yet the Comptroller stresses that the situation has not been remedied.

The State Comptroller’s report also notes that 54% of salaries and self-employed Israelis don’t even reach the tax threshold, which influences pension savings.

41% of pension tax savings go to the top 10% of earners in the country. 50% of families in which both partners work don’t fully realize their tax benefits on pensions.

The Israel Tax Authority responded, “Firstly the issue of initiating tax rebates was examined by the District Court last March which dismissed a class action on the matter. In order to make the processes for receiving tax benefits easier, in a routine way, as well as for the need of tax rebates, the Tax Authority has worked hard in recent years to expand its existing online information. The expansion of this data base also allow for the receipt of more accurate and true estimates regarding assessing the realization of benefits.”

Source: Globes