The Chamber of Auditors has urged the Tax Administration to delay the implementation of the pre-reservation of tax receipts for transactions over NIS 25,000 until January 1, 2025. The mechanism was designed to combat tax evasion and the use of fictitious receipts. It was supposed to take effect on April 1, 2024.
The Chamber’s call for a delay is due to the ongoing conflict, which has affected reservists and evacuees. Their businesses have already suffered greatly, and they cannot afford to deal with additional bureaucratic challenges. In a statement, the Chamber warned that it may be forced to take unprecedented measures if the decision not to postpone is made.
The pre-reservation system requires businesses to reserve a unique number for their invoices before submitting them for VAT writing off. Without a pre-reserved number, receipts will not be taken into account when writing off VAT. The mechanism was intended to make it harder for businesses to manipulate their financial records and reduce tax evasion.
The Tax Administration had initially planned to implement the pre-reservation system on April 1, 2024. However, following concerns raised by the Chamber of Auditors and other stakeholders, the start date was delayed until January 1, 2025.
Despite this delay, some businesses are still struggling with the new requirements. Reservists and evacuees who have been displaced or forced out of their homes are particularly vulnerable to these challenges.
The Chamber of Auditors emphasized that it understands the difficulties faced by these businesses and called on the Tax Administration to continue working closely with them to ensure a smooth transition towards full implementation of the pre-reservation system.
In conclusion, while some delays may be necessary in certain situations, it is important that governments continue working towards reducing tax evasion and improving transparency in financial transactions.