Israel Tax Authority — AI cross-referencing of capital declarations to close the tax gap

The Israel Tax Authority (Rashut haMisim) deployed AI-based tools that systematically cross-reference taxpayers' capital declarations against other financial data held in its systems, including bank records and investment data. Capital declarations — required of self-employed individuals and business owners — are compared to identify unexplained wealth gaps.

By June 2026, the system had identified discrepancies totalling NIS 20 billion (approximately $7 billion) from the roughly 4% of all filings it had scanned. At the Eli Hurvitz Conference on Economy and Society in Jerusalem (3 June 2026), Tax Authority Director Shay Aharonovich stated: 'Today we scan only 4%. We compared capital declarations in our systems with other reports and identified gaps totalling NIS 20 billion. We are moving toward reviewing 100% of all reports.'

The disclosure came as the Israeli government searched for ways to close a fiscal gap without raising taxes on the middle class. The 2026 revenue forecast was separately raised from NIS 540 billion to NIS 560 billion, partly in anticipation of additional enforcement yield from the AI-driven programme.

No technical specification of the AI system has been publicly released, and no independent audit or academic evaluation of the tool exists at the time of writing. The NIS 20 billion figure represents identified discrepancies and investigative leads rather than confirmed additional revenue collected. The system remains in active scale-up, with the authority committed to expanding from 4% to 100% coverage.

Read the full analysis: https://www.taxes.gov.il/English/Pages/default.aspx