Good News! New Tax Regulations Regarding Debt Collection

How the amount paid for “enforcement actions” by the municipalities (and other entities) for debt collection will change and be regulated from now on

The purpose of this new determination is to set the maximum amount for “collection expenses” municipalities and other governmental institutions can charge citizens, therefore regulating fees and penalties.

Up until now every municipality calculated its costs and expenses for debt collection in its own (unregulated) way. As a result, various local authorities charged different amounts for the same enforcement action.

The Tax Authority decided to end this practice therefore limiting, and most likely reducing, the costs to civilians.

Look at these examples:

15 Shekels for the delivery of a first written request to pay the unpaid bill/fine, etc.

15 Shekels for every extra request thereafter

22 Shekels for the delivery of a written request by registered mail (up to 3 a year)

22 Shekels for the delivery of a first written request by registered mail (only if a regular request by regular mail has been sent before this one)

120 Shekels if the authorities cannot find (and they now need to hire someone to “find”) you because your address differs from the address listed in the registry of the Minister of Interior, the Registrar of Companies, Registrar of Partnerships, Registrar of Cooperative Societies, Registrar of Associations; or the address given by you in writing (!)

160 Shekels Warning notice, including by posting a notice on your door, of intent to break into a residence in order to seize foreclosed property

This will have a tremendous impact on how the authorities work to collect their debts from citizens. They will have to work in a much more organized and faster manner.

A word of wisdom:

If you owe any kind of debt toward any municipality or any other governmental entity, be organized, work fast and do everything you can to reach an agreement because things will change and the creditor will “go after you” in a much more effective way.

Sincerely,

Tzvi Szajnbrum, Attorney at Law