New Law Eases Fines for Late Payment: Reduced Penalties and Interest Elimination in Israel

The Knesset cuts penalties for late fine payments

The Knesset has approved a bill in both the second and third readings that will reduce the penalties imposed on administrative and criminal fines in cases of delayed payment. Under the new law, which comes into effect on January 1, 2025, the fine will be set at 30% of the original amount, instead of the previous 50%. Additionally, penalty interest will be applied to the debt every three months under the Penalty and Indexation Law without compound interest.

This means that a fine of 1,000 shekels that is not paid on time will increase to 1,420 shekels within a year, as opposed to the previous 1,600 shekels. This reduction in penalties aims to make it easier for individuals and businesses to pay their fines on time and avoid accumulating debt.

It’s important to note that this new regulation applies only to administrative and criminal fines that are not paid on time. It does not affect other types of debts or penalties. Members of the Knesset believe that this new bill will encourage responsible behavior and help reduce financial stress for those who owe debts.

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