If you're new to Israel, one regular tax you need to be aware of is "National Insurance" otherwise known in Hebrew as "Bituach Leumi." Though this post is not concerned with the amounts you'll be paying, nor individual details, it is known that the minimum current amount paid by anyone (18 years and over) breathing in the holy air of Israel is ₪154 per month - whether employed or not. If you do earn any income while living in Israel, there is a complete listing of amounts earned together with amounts due to Bituach Leumi for tax purposes. Money received by the national insurance is supposed to take care of general "free" medical attention and other emergencies such as when one is unemployed (though a closer look at things may not make sense i.e. read the second sentence of this post again!)
One can pay one's dues at a post office, in person at Bituach Leumi's offices or even using the Internet with one's credit card. At various points in the year (or perhaps once only at the beginning of the year) one is issued a booklet with amounts due and by which dates those amounts are due - so making payments can be "easy."
Be warned however, you must pay attention to amounts you are being charged on a regular basis. In the event that you miss a payment, you will be fined a penalty - immediately to the amount of one shekel (usually!) There is no going back or making excuses for a one day late payment. If, on the other hand you have not informed Bituach Leumi of an increase in a month's earnings, you may find yourself owing Bituach Leumi not only an additional amount, but a heavy penalty tax of hundreds and even thousands of shekels immediately! It is not an easy thing to get off this and has been known to result in severe depression, panic and other difficulties to those hit suddenly with these amounts unknowingly!
Though all this applies and is completely "legal," keep a watch on what Bituach Leumi might be doing behind your back! A recent Oleh notified us of their honesty in making regular payments. They were required to pay some 250 shekel per month - which they do regularly via the Internet. A couple of months ago, Bituach Leumi returned their payment indicating that it was not needed. The next month, a payment was made again - and this too was returned to their account, indicating that payment was also not necessary. But suddenly Bituach Leumi "remembered" that payment was necessary after all, now charging them for the next month with a penalty of 2 shekels for not having paid their Bituach Leumi (perhaps for the previous two months?!) See graphics below:
The first graphic (see right hand side) clearly indicates 499 shekels return (254+245) - the last amount of 254 shekel was returned on the 4th December. Yet notice in the second graphic, the headings:
קרן - Monthly Amount - 245
קנסות - Penalties - 2
סה"כ חוב - Total Debt - 247
Notice the date when payment was due by (third graphic) - 15 December. Payment was clearly made just 11 days earlier... but after refunding the victim, Bituach Leumi debited him with the amount and another 2 shekels penalty (maybe because he paid early?!)
Indeed Bituach Leumi were one up on the innocent victim by returning the money that had been paid to them by the victim - back into the victims bank account - and then charging a penalty fee for "payment that was not made"!)
So what does this do to the victim practically?
It causes a loss of "penalty" money that should never have been taken. In effect Bituach Leumi have taken something that was never theirs in a perfectly "legal manner!"
There is another loss to the victim - and here's when the 2 shekel amount turns into a much larger loss! In his accounting records, the victim will have to now declare another 499 shekels as income - call it "compensation from Bituach Leumi" and be taxed on that! The accountant will view this as income from Bituach Leumi or perhaps even "compensation" from them. In addition to this, should the victim be in need of Arnona (land tax) assistance or anything else - where a copy of the bank statement must be produced, the authorities will see that Bituach Leumi are already helping the victim, causing the possibility that the additional help needed will never come about!
NOTE: As far as the Iria (Municipality) is concerned, an income of just 2000 shekel is considered enough to pay for a full month's expenses, and therefore not deserving of the discount for Arnona.
Be warned! Bituach Leumi, Arnona, banking fees and other taxes may tax and deduct whenever it pleases them. Should you find yourself in such a situation it is best to consult with a professional immediately.
Remember, your 2 shekels may not seem like much (as a start) but if we do not fight these things together, then effectively Bituach Leumi can be quite "legally" gaining some 14 million odd shekels for forbidden activities each month - by simply taking just 2 shekels from each citizen of Israel - all in the name of an honest penalty!
Have you been cheated in Israel by anyone? Tell us your story. We want others to know and to be warned.
* This post is not written by an accountant or legal representative but is based upon real tangible evidence in a victim's personal situation.