Degel HaTorah Chairman Moshe Gafni Blasts Finance Minister Smotrich Over Tax Benefits Dispute

A severe crisis erupted on Monday in the Knesset Finance Committee following the Tax Authority's decision to remove yeshiva and kollel organizations from the list of nonprofits eligible for tax benefits under Section 46. Moshe Gafni, chairman of Degel HaTorah and the Finance Committee, launched a sharp attack against Finance Minister Bezalel Smotrich and the Tax Authority director, accusing them of acting without authority and violating the law. Gafni stated, "Our greatest troubles come from those wearing the knitted kippot," referring to Smotrich and his allies, and demanded the reinstatement of the excluded organizations.

In response to the dispute, the United Torah Judaism faction took the unusual step of blocking approval of the updated list of eligible nonprofits, leading to the removal of the issue from the committee's agenda. This move highlights the severity of the conflict between the ultra-Orthodox parties and the Finance Ministry. Another United Torah Judaism MK, Yaakov Asher, joined the criticism, warning that the current move could set a dangerous precedent that might later target settler and messianic organizations, which some view as threats to democracy. He cautioned Smotrich directly, calling the situation a "dangerous slippery slope."

The dispute arises amid ongoing tensions between the ultra-Orthodox factions and the Finance Ministry over budgets related to Torah study institutions. Section 46 provides significant tax incentives to donors of recognized nonprofits, and removing yeshivas and kollels from this list could severely impact their fundraising capabilities. The ultra-Orthodox parties perceive this as a direct attack on Torah study, especially during a sensitive period involving debates over the Basic Law on Torah Study and detention laws.

The stalling of the nonprofit list approval is being used by United Torah Judaism as leverage against the government and may affect further parliamentary developments. The Finance Ministry and Tax Authority have not yet responded officially to the accusations. This conflict adds to a series of disputes between the coalition and ultra-Orthodox parties, potentially threatening government stability in the near term.