The Israeli Tax Authority’s voluntary disclosure program for cryptocurrency holdings has significantly underperformed, drawing far fewer participants than anticipated. According to a report by Globes, only 58 taxpayers have come forward to rectify their crypto tax filings, a stark contrast to the authority’s expectation of generating up to $1 billion in tax revenue. Disclosures have so far covered roughly $50 million in crypto capital, a small fraction of the predicted amount.
Introduced in August 2025, the program offers criminal immunity to eligible individuals who correct their reports and pay the full tax owed by August 31, 2026. Eligibility is limited to those whose crypto holdings did not exceed $522,000 as of December 2024. The lackluster response suggests that many crypto holders remain hesitant to participate.
Tax expert Iftach Simhony highlighted a key flaw: the absence of an anonymous initial stage. He noted that without anonymity, taxpayers who perceive their enforcement risk as low may avoid entering a process that exposes them before receiving any certainty. This structural issue may be deterring widespread participation.
Bank of Israel data reveals that Israelis held approximately $1 billion in crypto assets as of mid-2024, indicating a vast gap between expected disclosures and actual filings. The tax authority believes that substantial crypto profits remain undeclared, and the disclosed $50 million is just a fraction of the tax base.
This struggle comes as Israel tightens its oversight of digital assets. The central bank has been exploring stablecoin regulations and evaluating the role of private digital currencies in future payment systems. Meanwhile, in the United States, lawmakers have proposed the PARITY Act, which would exempt small crypto transactions from IRS reporting, reflecting ongoing global debates on balancing tax enforcement with practical burdens.