Following the economic crisis it is experiencing Israel Due to its ongoing war on the Gaza Strip for a year, the government imposed a tax on banks and set it for the period 2024 and 2025, in an attempt to find an additional resource in light of the remarkable expansion of its military expenses over the past year.
However, the Ministry of Finance's attempt to extend the tax levy to include the year 2026 angered the Association of Israeli Banks, prompting it to send a strongly worded letter to the minister. Bezalel Smotrich She accuses him of violating the agreement between the two parties.
According to the report published by the Calcalist newspaper, writer Irit Avisher stated that the banks expressed their strong rejection of the special tax that the government intends to impose starting in 2026, noting that this decision represents a clear violation of the agreement previously reached with Finance.
According to the draft law on arrangements, an inter-ministerial committee will decide by the end of the third quarter of 2025 whether an extension of the tax is justified, which the banking union opposes.
The writer reported that the banks sent a strongly worded letter to Smotrich, as they considered that this decision contradicts the understandings reached earlier this year, which stipulate that the tax will be limited to a period of only two years (2024-2025). In its letter, the Union of Banks considered that this step undermines confidence between the financial sector and the government.
The banks stated in their letter that Smotrich had personally promised them – during a previous meeting – that the tax would be one-time and no other tax measures would be added. She pointed out that breaching this promise represents a violation on the part of the minister, and harms the government’s credibility.
The draft economic plan for 2025 indicates that the high level of profitability achieved by banks is due to… Interest rates It is the main reason behind this new proposal. However, the banks consider that the tax extension is not in line with the settlement they reached with Finance earlier in the year.
The author expressed – the end of the article – the banks' surprise at re-introducing this idea only half a year after the law was passed, and called on Smotrich to remove this proposal from the next budget, noting that the previous settlement was the result of exceptional circumstances that should not be repeated.