The chief executive of the Dubek tobacco company, Baruch Zvi Biller, has been arrested for alleged tax evasion.
Zvi Biller and Dubek's chief financial officer, Shmuel Kalush, are charged with evading tens of millions of shekels in sales tax.
The arrest warrant states that from early 2001, Dubek's sales tax payments to the VAT and Customs Authority were based on the recommended price of cigarettes to the consumer. But they should have been based on actual sale prices to consumers, resulting in a difference of tens of millions of shekels.
The warrant charges that the company's officers knew about the situation and trying to conceal it.
Zvi Biller and Kalush were questioned Wednesday morning at the auditing unit of the VAT authority, where they were advised of their arrest on suspicions of tax offenses.