The “Arbitration Commission” of the Ministry of Finance recommended reforming savings programs

The Commission recommended combining investment savings banks, mutual funds and savings insurance policies on a single platform. This will allow the public to move from one instrument to another without creating a “taxable event.” In this case, a person will pay income tax only once, when withdrawing money from a savings account, and not when switching from one instrument to another. This will significantly increase the volume of savings and make the use of instruments more profitable.

At the same time, the commission recommends setting the threshold for full tax exemption when transferring accumulated funds into the format of monthly payments upon reaching the age of 60 at the level of 200 thousand shekels for all programs in total.

This means that clients of investment savings banks will lose a significant part of the benefit (currently, the tax exemption in this scenario is given for contributions of NIS 69 thousand per year, and not NIS 200 thousand in total).

It should be noted that the head of the capital market department, Amit Gal, opposed the recommendations of the commission.