Israeli Military Intel Wants to Access Israelis’ Tax Files

With the blessing of the attorney-general, the state is allowing MI to access every detail of your tax files, without explanation why that’s necessary

Yossi Melman
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The head of Military Intelligence, Maj. Gen. Tamir Heyman.
The head of Military Intelligence, Maj. Gen. Tamir Heyman.Credit: Ofer Vaknin
Yossi Melman

Just as the fragile bonds of Israeli society are unraveling, just as democratic values that seemed self-evident are eroding, Attorney General Avichai Mendelblit allowed another important democratic value to be undermined: Israelis’ right to privacy and to the confidentiality of private assets.

Last week the government agreed to give the head of Military Intelligence, Maj. Gen. Tamir Heyman, access to all the Tax Authority’s data on private Israeli citizens, which is supposed to be confidential.

The general permit was signed by Eran Yaacov, the head of the Tax Authority. It enables the Tax Authority to reveal information under the Value Added Tax Law, the Customs Regulations, real estate tax acts (purchase and appreciation) and the Income Tax Law, to the head of MI, or to any person he has authorized for that purpose.

I tried to get explanations from the Tax Authority, MI and the attorney general, but the replies were laconic, vague, evasive and tautological. “The permit was given in compliance with the power granted to the Tax Authority by law... The information will be conveyed based on security needs and for the purpose of safeguarding state security,” the IDF spokesperson stated, and qualified: “In the context of the permit, personal details of Israeli citizens will not be given to MI.”

That reply is rather bewildering, because the only thing the Tax Authority has is personal information about Israeli citizens, the companies they own, and the transactions they carry out. Also, what exactly are the “security needs”? What could this great secret be, whose protection requires MI to pry into people’s income tax assessments, and reports on VAT, capital gains and appreciation tax?

“We cannot elaborate further for reasons of state security,” replied the IDF Spokesperson with its characteristic resoluteness, and unsurprisingly. The IDF Spokesperson’s Unit – the biggest public relations firm in Israel – supplies information only when it suits it. Like any monopoly, it prefers to control the flow of information. It avoids answering questions, organizes briefings for generals and senior officers and sends military correspondents to the borders to report on successes.

I had hoped that the Tax Authority, which is deeply committed to safeguarding the people’s privacy, would be more aware of the importance of transparency in a democratic society, and more sensitive to the suspicion provoked by granting such permission. But there they weren’t at all concerned. Tax Authority spokeswoman Idit Lev Zerahia refused to reveal the purpose for which the permission was given and sent me back to MI, which as mentioned, stayed mum.

Attorney General Avichai Mendelblit at a legal conference in Herzliya, September 2020.
Attorney General Avichai Mendelblit at a legal conference in Herzliya, September 2020.Credit: Meged Gozani

She did however reveal that the permission given to MI had also been given to a list of other defense entities. These include: the heads of the Shin Bet security service, the head of Mossad, the Crossing Points Authority in the Defense Ministry, the head of the Anti-Terrorist Unit, the Defense Ministry department for the Oversight of Defense Exports, and the Money Laundering Authority at the Justice Ministry.

I tried to understand the rationale behind these strange, worrying permits. Let’s assume that the Money Laundering Authority needs this permit from the Tax Authority in order to do its job. And let’s even assume that the Shin Bet, which in any case has access to all the databases in Israel, also needs an explicit permit from the Tax Authority for a similar purpose (to prevent money transfers from terror organizations to the Palestinian West Bank, Gaza and Israel).

But why do the Police Anti-Terrorist Unit or the Department for Oversight of Defense Exports, or the Crossing Points Authority need access to this information? Moreover, all the entities that have received permission so far are civilian in nature, while MI is part of the IDF – and should not be involved in purely civilian matters. Even if MI needs the permit in order to enable its wiretapping and decryption unit (8200) to help it block financing for terrorism, why is the permit so sweeping?

Confidential Ltd.

Scholars of law and watchdog organizations safeguarding Israeli democracy, or organizations concerned about privacy, are deeply worried about the decision by the treasury and the Tax Authority.

“One thing glaringly missing from the replies sent by the Tax Authority and the IDF: An explanation as to why there’s a need for sweeping and inclusive permission to provide information, instead of individual approval given pursuant to a specific need regarding this or that person,” says attorney Elad Mann of Hatzlacha, an NGO that seeks to promote good governance.

“To conduct our business and lives properly, we need to know we are protected by the laws of confidentiality; the same applies to medical and psychological confidentiality and other information we provide to professionals and to the authorities,” Mann added. “The same applies to accounting and financial information an individual or a corporation provides to the tax authorities, to the National Insurance Institute, to other authorities, to the bank or insurance company.”

A Military Intelligence base in Israel
A Military Intelligence base in IsraelCredit: David Bachar

The NGO Privacy Israel, which was founded after the pandemic began because of the unprecedented virus-related surveillance of Israelis, wrote to Finance Minister Yisrael Katz, to the head of the Tax Authority and the head of MI, decrying the blanket permission. The Tax Authority doesn’t even have the legal power to grant the permit, Privacy Israel argues, because “the clauses noted in the general permit, on which the agreement is based, are not clauses that authorize the transfer of personal information to the defense authorities” and their objective “is only to enable the collection of taxes in compliance with the provisions of the law.”

Privacy Israel also stresses that “the Tax Authority possesses personal and sensitive information about the entire adult population in Israel, including current information on everyone’s financial status, assets, family members, status in Israel (disabled, new immigrant, and so on), transactions, taxes paid to the government and more.”

Furthermore, MI’s role is “to consolidate intelligence assessments and to warn the government of impending war with foreign enemies and terrorists. For that reason, it is not clear how and why it needs to receive information and documents about the country’s citizens,” Privacy Israel wrote.

Actually the Tax Authority permit is just the latest move in a process of eroding the public’s right to privacy in recent years, especially subsequent to the outbreak of COVID-19. Some see this process, along with the systematic weakening of the gatekeepers, as another step on the road to a military “democtatorship” dictatorship in Israel.

Even before the pandemic, many perceived Israel not as a state that has an army, but as an army which has a state. When the pandemic began, the government, relying on emergency regulations, authorized the Shin Bet to use its technological surveillance tools (and in doing so also exposed them); the police received broad powers for cellular location pinpointing and used drones to catch quarantine violators; hospitals filmed and eavesdropped on patients; in schools, face identification systems were installed; and former Defense Minister Naftali Bennett argued that the dubious spyware company NSO should be hired to “rank” citizens by their potential infectiousness.

We could therefore have expected Attorney-General Mendelblit to speak out on the matter. I asked his bureau the following questions: Were these authorizations given with the knowledge and approval of the attorney general? If so, by dint of which law? Why are they being given? For what purpose? What guarantees were given to preclude their potential abuse? Isn’t it a serious blow to democracy when a civilian organization enables the unrestricted transfer of information by means of an a priori general permit? Why is such authorization also being given to a military entity?

“I suggest you address the questions to the Tax Authority,” was the email response of the spokeswoman for the Jerusalem District of the Justice Ministry, Efrat Oren, in a reply that can only be compared to slamming down the phone.

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