The answer to the second question will answer the first question as well. The main reason that the government is proposing the new law is to crack down on money laundering. גמחי"ם today are a very easy way to launder money. Let's say you have 100,000 shekel that you don't want the government to know about it and you want to launder. The solution is simple, you go to a גמ"ח and give them the 100,000, you then immediately take a loan of 100,000 from the same גמ"ח and kick back a small percentage to the גמ"ח owner. You now have a legitimate 100,000 "loan" which is tax free which you simply never pay back. If the government comes knocking asking about where you got the 100,000, you show them the loan papers from the גמ"ח. Since there is no regulation, there is no way for the government to know if you paid/are paying back the loan. Everyone wins, you have laundered your money and the גמ"ח owner makes an easy profit. How much of this is going on is pure speculation, in any case this is what the government wants to prevent.
The Charedi opposition to this is for 2 reasons:
- A lot of money made in the Charedi world is "off the books" and not reported to the government. There is no question that the גמחי"ם are laundering some of it. If the גמחי"ם will now need to report every transaction it will be much harder to hide this money.
- Charedim have an inherent mistrust of the government. Therefore, even if they are doing nothing wrong they don't want the government knowing how much money they have.
What is clear is that this bill will pass in the near future and that this will be another blow to the average Charedi Avreich who depends on גמחי"ם to survive. With fewer גמחי"ם it will be much tougher to borrow the money they desperately need.