Globes’ exposure of the establishment of the NSA unit (national bookkeeping) in the tax authority is causing a stir among small businesses and the organizations that represent them. The small and medium-sized businesses in the tax authority, he told Globes, that “this is a populist and cowardly plan that comes at a time when small and medium-sized businesses have not recovered from the Corona epidemic. Instead of small and medium-sized businesses in Israel receiving a hug and support from the state, the tax authority persecutes them and sees them as potential criminals. It is a demagogic move that sacrifices the backbone of the economy on a false representation of deepening debt collection. “
The Tax Authority is setting up a new unit to deepen the collection of small businesses without me
As revealed in Globes, the tax authority is currently setting up a unit whose entire purpose is to increase enforcement on small businesses and deepen collection from them. The new unit – NSA, an acronym for “National Bookkeeping” – will include six teams that will operate in the offices of various tax officials around the country, and their only business will be to examine whether small businesses properly manage the books of accounts and reports on their revenue. And in reporting the income, sanctions are applied against the business owners, from warnings to disqualification of books and the issuance of an assessment according to the best judgment (an assessment in which the tax authority assesses the true income of that business and taxes it according to its estimates).
Today, these inspections are carried out by PA employees in the offices of tax officials, who are not “intended” specifically to handle the bookkeeping of small businesses but are associated with it as part of periodic enforcement operations or are sent to conduct business reviews and covert purchases. At the same time, the same employees can also work on other portfolios that are not related to bookkeeping in business. Now, the PA wants to create a unit that will focus on managing the books, and allocates such a unique workforce. This, out of a desire to “improve the audit and enforcement procedure of bookkeeping regulations, through improved intelligence capabilities, additional manpower and a ‘closing circle’ between the bookkeeping audit and the assessee in the required cases.”
“Small business owner unable to meet bookkeeping requirements”
CPA Schreiber attacks the authority for this, noting that “the authority avoids dealing with tycoons and powerful entities in the economy who arrange for themselves haircuts and tax havens, and instead harms those who need assistance.”
CPA and tax advisor Revital Seton Ben-Ari, head of the taxation department of the Craft and Industry Association, also opposes the establishment of the unit today, she said. And the discussions will intensify and burden the businesses with difficulties.
“We are in favor of a real tax and those who do not report their income should be treated severely, but the problem with such reviews does not end with whether the business owner or his employee reported the income or not, the problem is more serious: a small business owner A librarian, etc., who works in the field and not near a computer in the air conditioner, is unable to meet the requirements of the bookkeeping instructions in writing and word for word. He collapses under the load of tasks he has to do in running a business on his own.
“Most businesses in Israel are one-person businesses, which are responsible for marketing as well as financing and procurement as well as for carrying out work as well as for collecting customer service and more and more. “And not just by email on a Word page or WhatsApp as many do, but a printed notebook with numbers or software designed for it) He has all the authority to disqualify the business owner’s books and sometimes it is not an injustice on his part.”
“Instead of helping a small business grow, put more pressure on it.”
Seton Ben-Ari explains that a unique team that will focus on managing books can fatally hurt businesses. “A librarian who registers customer appointments in the diary and the customer cancels but she forgot to write on her name that the queue was canceled – this is a defect in the bookkeeping instructions that required book disqualification. An employee withdrew money from the cash register Excess at the checkout in the morning and not putting a note at the checkout, enters a bookkeeping review, issues a report on how the checkout is at the moment and there is no match – it is book rejection. “Or you will compromise on a certain amount. ‘
Seton Ben-Ari adds that “the perception that a self-employed person is a thief and rich that has been ingrained for many years must disappear from reality. In reality today 85% of businesses in the State of Israel do not even reach a million shekels turnover, “Changing perceptions and looking for the money that has disappeared from the state elsewhere. Establishing such a NSA team, in the days when small businesses are collapsing and are in a period of existential anxiety is another blow to the heads of small businesses.”
The chairman of the business sector presidency, Dubi Amitai, also believes that this is a negative initiative, given the timing of the unit’s establishment. “It is important to balance and remove the bureaucratic burden and to direct resources to recovery and growth, and not to impose additional difficulties on the small business public.”
Yoram Mualami, who heads a group of self-employed people who petitioned the High Court against the Tax Authority’s demand for a refund of the grants, added that “after two very difficult years, the self-employed had to deal with the corona crisis that shattered entire families.” The omicron virus has been around for 4 months, this is clearly insolence on the verge of forehead arrogance, when these days the self-employed face the demand of the unprecedented state, to return the corona grants that were for them a dignified subsistence allowance, in the absence of a social safety net. It turns out that the prevailing assumption among the tax authorities is that the self-employed bring home sacks of money, work in the black at the end of the day, and have a new Mercedes in the parking lot, with the truth being that most self-employed and small businesses have crashed in the last two years.
“The tax authority needs to rethink the status of the self-employed, and the question arises where is the budget for the establishment of the new unit in the tax authority. Among them are quite a few self-employed people over the age of 50 who will not be absorbed into the labor market, and tens of thousands of single-parent self-employed women.
It would have been better if he had sought the money from the tycoons and the giant companies. “
The Tax Authority’s response
The Tax Authority responded: “The blatant style in which some of the respondents chose to express themselves is to be regretted. To optimize and streamline the audit and enforcement procedure of bookkeeping regulations, through improved intelligence capabilities, additional manpower and a quick ‘closing circle’ between the bookkeeping audit and the assessee in the required cases.
These capabilities will allow the Authority to focus its audit efforts in the field of bookkeeping on businesses that have received indications of defects, thus avoiding unnecessary friction with law-abiding businesses. At the same time, the move will contribute to the ability of tax offices to focus on book and mole management audits in larger cases. In this way, the tax authority will implement the responsibility it has to act to equalize the tax burden and to preserve the public coffers. “