Israeli Legal Advisor Accuses Knesset Finance Committee of Illegal Delay on Tax Credit Approval for NGOs
Galit Baharav-Miara, Israel's Attorney General, has accused the Knesset Finance Committee of unlawfully delaying approval of tax credits under Section 46 for nonprofit organizations. This delay appears to be retaliation after the Attorney General, with Supreme Court approval, blocked tax credits for yeshivas attended by draft evaders. Baharav-Miara conveyed this update to the Supreme Court ahead of a hearing on a petition by the NGO Israel Hofshit seeking to revoke tax credits for such yeshivas.
The Attorney General's update states that on June 17, the Finance Committee did not hold any discussions on requests for Section 46 tax credit approvals, including those unrelated to religious studies institutions. This inaction is causing unlawful harm to unrelated nonprofits and raises concerns about inappropriate linkage between these and the yeshivas in question. Instead of a hearing, committee chairman Hanoch Milwitsky (Likud) sent a critical letter to the Tax Authority demanding it submit the list of yeshivas for committee approval. Milwitsky condemned the Attorney General's directive as "malicious" and "heartless," calling it collective punishment and urging disregard of the instruction.
Most sanctions against draft evaders have followed petitions by Israel Hofshit, represented by attorney Hagai Klay. The current petition challenges tax credits for donors to yeshivas with draft evaders, based on the Supreme Court principle that benefits should not fund evasion. On April 29, Baharav-Miara instructed the Tax Authority to prepare to cancel tax credits for donations to yeshivas with draft evaders, which constitute the majority of adult Haredi yeshivas. She stated the state cannot indirectly fund institutions encouraging evasion by granting tax benefits.
In early July, the Tax Authority sent 147 letters to yeshivas on the submitted lists, requiring declarations that no draft evaders study there and that none will be admitted. Institutions already holding Section 46 status must declare by September 1 that they do not host draft evaders. Meanwhile, 23 Haredi donors, led by Eli Palay, publisher of the Haredi newspaper Mishpacha, requested to join the Israel Hofshit petition hearing and delay it. They argue the Attorney General's position severely infringes their constitutional rights as longstanding philanthropic donors and accuse her of exceeding her authority by imposing new conditions without legal basis, applying selective enforcement, and violating equality principles.
