Israeli Parliament Deadlocks on Proposal to Address Alleged Discriminatory Tax Benefits Against Haredi Institutions
The issue of alleged discrimination in tax benefits for Haredi religious institutions under Section 46 was brought to the Knesset plenum on Wednesday by MK Michael Malchieli of Shas. Malchieli demanded a parliamentary discussion on what he described as collective punishment against Torah institutions due to students who have not regularized their military status. He argued that similar policies are not applied to academic institutions in comparable situations. Malchieli strongly criticized the Finance Ministry officials and legal advisors, accusing them of pursuing an independent and political agenda, including opposition to kosher reform and biased financial data presentations. He also condemned the Supreme Court and the Attorney General for what he called a "persecution of Torah learners," questioning the allocation of police resources to enforce these policies.
In response, Tourism Minister Haim Katz, speaking on behalf of Finance Minister Bezalel Smotrich, emphasized that yeshiva students are not exempt from military service obligations, especially during wartime. However, Smotrich sharply criticized the judiciary, accusing the Supreme Court and Attorney General of aggressive and emotional actions that harm the Haredi community and undermine efforts to increase Haredi enlistment. He likened their conduct to "a bull in a china shop," destroying bridges for Haredi recruitment and weakening the IDF.
MK Oded Forer of Yisrael Beiteinu opposed the proposal, accusing the Haredi parties and government of turning draft evasion into a value, while soldiers and reservists bear the war burden. The Knesset voted on including the issue in the agenda, resulting in a 7-7 tie, causing the proposal to fail and the requested debate to be canceled.
This controversy follows a May directive from Attorney General Gali Baharav-Miara to immediately halt tax refunds on donations to Haredi institutions with students obligated for military service, sparking fears of significant damage to donations reliant on Section 46 tax benefits. The Tax Authority recently requested dozens of yeshivas to sign affidavits confirming no students have unresolved military status, threatening to revoke their tax benefits otherwise.
