Comment / It Pays to Dodge Tax

Don't tell anybody we told you, but we have a great tip for you. If you're considering evading tax, you can do it practically without fear.

Don't tell anybody we told you, but we have a great tip for you. If you're considering evading tax, you can do it practically without fear. As long as you don't dodge more than say a quarter-million to NIS 300,000 worth of tax, you can relax. The chance you'll be forced to pay up is remote.

It isn't that we're suggesting tax dodgers get a medal. Not at all; dodging tax is, to put it simply, a form of theft - theft from me, from your parents, from your friends and neighbors, from the impoverished children of Sderot and Ofakim, theft from everybody who pays tax and who because of tax dodgers have to pay even more. It is theft from everybody who needs the state's help; but because of dodgers like you, the state doesn't have the wherewithal and has to cut its welfare budgets.

We have no empathy whatsoever for tax dodgers like you. If it were up to us, you'd have to pay your tax debts in full, plus fines amounting to hundreds of percent. Some of you we'd happily send to cool your heels in jail. But that's the problem, it isn't up to us; and as things look now, you aren't running the risk of hard time. In fact, you may not be facing any punishment at all.

Why? Because the State of Israel is sloppy. Its legal system is sloppy and the prosecution has basically thrown up its hands in despair. The prosecution can't handle you, and therefore your grave misdeeds, even when exposed, generally have no repercussions.

You doubt it? Here are some facts:

Tax returns get filed two or three years late. If the Income Tax Authority is efficient about it, it takes at least a year until indictments are prepared and passed on to the prosecution, where the case gets in line.

How long is the line? Well, there are 650 pending tax evasion cases alone. The prosecution has been bending over backward to expedite handling, and is pursuing 100 to 150 cases a year in court. Ergo, your case won't come up for about 6.5 years, which is now about 10 years after you dodged tax. The courts, another bottleneck, have also tried to expedite handling and have cut the average time per case to about 2.5 years.

In short, your sentence will be handed down 12-13 years after the crime was committed.

Say you dodged NIS 40,000 in tax. What sort of sentence might you get 13 years down the line?

The court would feel silly coming down too hard on a person who dodged NIS 40,000 in tax 13 years before. The sentence will therefore be lenient and will not deter anybody. Everybody knows it. There is an unwritten understanding, therefore, that there is zero point in pursuing cases for small amounts.

The threshold is, as noted, somewhere between a quarter-million shekels to NIS 300,000. Below such sums, the prosecution doesn't want to know; it already has 650 pending cases involving higher sums. One doesn't even want to imagine how long the line would be if the authorities didn't filter out the minnows.

A Justice Ministry source blamed, first and foremost, the lack of manpower at the prosecution. What is the ministry's solution? A quickie fine for small dodgers who get caught - an inevitably inferior solution to criminal punishment, especially if the dodger realizes he can negotiate. The savvy dodger knows that the authorities have no patience to pursue bit cases.

That is our tip for you. The tip is that dodging tax pays, as long as you keep your sights low. The state won't do anything about it. Good luck.