Israeli Supreme Court Reviews Petition Against Tax Benefits for Yeshivas with Draft-Dodging Students

The Israeli Supreme Court convened on Monday to hear a petition challenging the tax recognition of donations to yeshivas where students obligated for military service have not regularized their status with the army authorities. The hearing was conducted by a panel of three female justices: Daphne Barak-Erez, Gila Kanfi-Steinitz, and Ruth Ronen.

The petition was filed by the NGO "Free Israel" against the Finance Minister, the Knesset Finance Committee, MK Moshe Gafni, the Yeshiva Union, the Association of Yeshiva Directors, and several yeshivas. The core issue is whether donations to these institutions should continue to qualify for tax credit under Section 46 of the Income Tax Ordinance.

The petitioner demands that tax recognition not be granted or renewed for institutions where draft-dodging students study, and that existing recognitions be revoked where applicable. Ahead of the hearing, the state submitted legal positions asserting that, based on the Attorney General's advice, indirect support via tax benefits should no longer be extended to institutions with students who have not resolved their military status. A mechanism has been developed to implement this policy, including checks and declarations from institutions seeking the benefit.

Respondents, including the Yeshiva Union, the Finance Committee, and the yeshivas involved, submitted responses urging the court to reject the petition and related requests, each presenting their legal arguments. The court's deliberations focused on whether to continue recognizing donations for tax purposes to religious institutions attended by draft-dodging students.