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Arrests Made In Latest Scandal To Grip Israel's Tax Authority

by Lorys Charalambous,, Cyprus

16 November 2007

Just months after a major scandal that went to the top of the Israeli Tax Authority and to the heart of government, six Israeli tax officials have been arrested by police on suspicion of accepting bribes.

The six ITA employees, in addition to one employee of the Jerusalem Municipality, were arrested on Wednesday on suspicion of accepting bribes for the payment of tax credits and doing other favours for businesses.

Following an undercover operation in which an agent, who was an accounting expert, was planted in the tax department, the police believe that the accused employees accepted cash from local business owners to reduce income tax payments, cancel property liens, terminate tax investigations and pay tax refunds.

The police also believe that the scam was not confined to the six individuals concerned, and they plan to make more arrests in due course.

In a statement, the Israeli Tax Authority downplayed the incident, arguing that the actions of a few should not "cast a shadow on all ITA employees who faithfully carry out their duties".

"The ITA will continue to help the police in whatever they request in order to help reach the truth," the ITA stated, according to reports.

"The subject of ethical behaviour is in our eyes of the highest value, and all the more so as a law enforcement organization. The authority is acting consistently with full cooperation with the Israel Police to reveal and isolate this phenomenon wherever it exists," the Authority stressed.

However, the incident is another embarrassing episode for the Tax Authority as it struggles to repair its tarnished reputation following a major scandal earlier this year, in which influential business people were suspected of paying bribes to the government in order to secure favourable appointments with the ITA.

This investigation even led police to question Prime Minister Ehud Olmert, who was Minister of Finance when the alleged offences took place, although he was never viewed as a suspect in the probe.

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