Israel’s Treasury notified banks in this country today that it intends to use powers granted the Government under the income tax law to obtain information about bank accounts in cases where income tax evasion is suspected. The Treasury stated that it will try to keep applications for such information from banks to a minimum.
The Treasury’s announcement followed protracted negotiations with the banks. Under the ruling, only the Commissioner of Taxes, his deputy, and the tax assessors in Jerusalem, Tel Aviv and Haifa will be authorized to demand such information from the banks.
During the negotiations, the banks contended that violation of bank secrecy would drive many accounts aways from their institutions. Treasury officials, however, maintained that they considered these fears unfounded. They stressed that studies carried out by the Bank of Israel showed that, in other countries, income tax officials are given full access to all records in cases where tax evasions are suspected. Such is the practice, the survey showed, in the United States, England, Holland and France.
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