An unpleasant figure was published yesterday by the State Comptroller, who determined that the Tax Authority owes citizens NIS 3.6 billion in over-collections and that the deficiencies that led to these unnecessary payments have not been corrected.
CPA Yaniv Angel, co-manager of the Israeli branch of the international consulting firm Auren, believes that "the main reason for this is that the tax authority does not act proactively to provide tax refunds to those entitled."
Angel notes that "by law they must return the funds, but there is a technological inability to obtain the information required to return the funds." As an example of the missing information Angel says: "Some people know they deserve a tax refund, but their bank account details are not updated with the tax authorities, and as long as there is no update of the funds the refund will not come. Like twenty years ago the tax authority sends a message, and if we changed our address or we did not pay attention to the mail, we will not receive it. They do not work by phone or e-mail. Sometimes the letters do not reach the right destination, but according to them they have done their duty."
Angel, on the other hand, notes that when a citizen owes taxes, the tax authority is not satisfied with a notice that did not reach its destination, but confiscates his bank account if he did not address the debt notice.
"On a practical level, the technology systems and the synchronization between the various systems need to be improved for the information to pass, but the main problem is the state's attitude towards the citizens," Angel says. He gives an example of this in a document that a citizen must fill out in order to receive a debt repayment, but when the title of the document is 'Report' he is reluctant and does not want to access the document. In contrast the same document is referred to in the US as a ‘tax refund’, so the title becomes much more inviting to the customer to claim his rights. “This wording expresses the relationship between the parties. Many people say that even if I deserve money, I will give it up as long as they do not interrogate me and who knows from where I will accrue a debt."
Angel further noted that in European countries, high school students are taught not only their civic duties, but also their rights. In addition, the tax authorities hold workshops for the public, "which began to happen a little in Israel but not to a sufficient extent."
A citizen seeking to determine his rights is forced to hire the services of an accountant, when often the amount of reimbursement is lower than the accountant's fee, while if the citizen had the simple tools to recognize his rights he could deal directly and independently with the authorities.
For that to happen, Angel says, economic education is needed in high schools and people must internalize the principle that sometimes the state is wrong and the citizen can get taxes back. In addition, "If the tax authority makes information accessible we can achieve the goal," he says, noting the difficulty the older population has in accessing information online, and they too need to find solutions that will enable them to reach their rights.