Special Payment to Achieve Budget Targets Law (Temporary Provision - Swords of Iron), 5784-2024

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Highly profitable banks will have to make a special annual payment to the state treasury. The payment will be 6% of the profits the bank made from its activity in Israel. The obligation applies to banks whose assets make up at least 5% of the total assets of all banks in Israel. The law sets a special period of application: from April 1, 2024 to December 31, 2025. The total annual payment from all banks will not exceed 1.2 billion shekels in 2024 and 1.3 billion shekels in 2025. If a bank's payment exceeds its relative share of the maximum set for that year, the difference will be refunded to it. The Finance Minister, with the approval of the Knesset Finance Committee, may cancel the payment for 2025 if there is a material change in economic conditions, such as a significant change in interest rates or unemployment. The law also provides that in 2025 the payroll tax a bank pays on its profits will be 17%, unless the Finance Minister issues a different order. The Supervisor of Banks will report to the Knesset and the Finance Committee every six months on the interest rates and fees banks charged their customers, compared with the period before the law took effect.