Suspicion: Construction Company Owner Deducted Fictitious Invoices Totaling 26 Million Shekels
According to the suspicion, a construction company owner from the center of the country deducted fictitious invoices through his company totaling approximately 26 million shekels, while offsetting input tax of about 4 million shekels. After being questioned by the Tax Authority, he was released under restrictive conditions.
The Tax Authority arrested for questioning a construction company owner from the center of the country, on suspicion of deducting fictitious invoices totaling approximately 26 million shekels. The suspect, Shmuel Gazit, a shareholder and director at Niti Development and Construction Ltd., was brought before the Jerusalem Magistrate's Court and released under restrictive conditions.
Gazit, a resident of Ramat HaSharon, was arrested as part of an investigation conducted by the Jerusalem Customs and VAT Investigation Department. According to the suspicion, between 2022 and 2025, the suspect deducted tax invoices suspected of being fictitious in the company's books, with the total deducted tax amount reaching approximately 4 million shekels.
A National Plague
For years, the Tax Authority has been trying to combat the phenomenon of using fictitious invoices, which is perceived as a national plague and which, according to estimates, drains many billions from the state treasury.
As part of this effort, alongside the continued implementation of the "Israel Invoices" system, which requires reporting invoices to the Tax Authority in real-time, the Authority is allocating resources to expose criminal networks distributing fictitious invoices—where VAT evasion is estimated at hundreds of millions of shekels—as well as to locate "small evaders" who hide a few million each, but whose combined actions create a large "hole" in the state treasury.
The next stage in the fight against fictitious invoices, intended to catch these "small" evaders, is a reform requiring immediate online VAT payment at the time of the transaction. The emerging reform, known as "Israel Invoices 2.0" (VAT Online), is based on upgrading existing technological infrastructure to create a fully digital, green process without the need for paperwork.
*** Presumption of innocence: Shmuel Gazit has not been charged or convicted, and he is entitled to the presumption of innocence.
