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The Finance Ministry accountant general is initiating a clemency program for Israelis who have money hidden overseas illegally.

Accountant General Yehoshua (Shuki) Oren's proposal is to repatriate the money and to charge taxpayers only the regular tax rates on the funds, without fines or criminal charges.

The offer would apply to funds that citizens took out of Israel and hid overseas without paying taxes. These amounts are estimated to total tens of billions of dollars, and possibly even more than $100 billion.

The Finance Ministry also has other motives in promoting such a plan: Bringing in such large sums of cash could help ease the credit crunch, by increasing the money supply and by allowing these businesspeople to free up various guarantees and provide alternative sources of funding.

Due to the current economic crisis, the treasury believes that several businessmen who hid funds overseas need the money here. Even if they have large sums stashed abroad, they can no longer use the money in Israel legally.

The treasury proposal is meant to let them "launder" the money legally and bring it back to Israel. In such a case, the violators may find it worthwhile to pay the taxes, especially as no criminal charges will be pressed.

It is still not clear how much tax they will pay. In any case, such a move will most likely require legislation - and it will not apply to corporations or other businesses, only individuals.

Another factor that may influence people to repatriate such funds is growing international pressure against tax evaders, as many former tax havens such as Switzerland and Lichtenstein have given in to heavy European and U.S. pressure to relax their strict bank secrecy.

A number of countries, in particular Germany and Italy, have implemented similar programs.

The treasury is aware of the ethical problems involved in clemency for tax evaders, but for now the economic crisis seems to outweigh such concerns.