Israel Cancels Tax Benefits for Yeshivas with Draft-Dodging Students Following Supreme Court Ruling

The Israeli Supreme Court, sitting as the High Court of Justice, dismissed a petition by the organization "Free Israel" concerning the continuation of tax benefits for religious yeshiva institutions where draft-eligible students have not regularized their status with the military. The petition followed a prior Supreme Court ruling on government support to yeshivas, arguing that just as government funding should not continue for institutions with students evading conscription, tax benefits for donations to these institutions under Section 46 of the Income Tax Ordinance should also be revoked.

During the hearing, the state largely accepted the petitioners' position, announcing that yeshivas seeking to obtain or renew approval under Section 46 must declare that none of their students are draft-eligible individuals who have not regularized their status, and must submit relevant student lists. The government has already sent letters to 147 religious institutions and requires even those with current approvals to comply with the new documentation and conditions. Institutions failing to meet these requirements may face revocation of their approval after a hearing.

The ruling was delivered by Justices Daphne Barak-Erez, Gila Kanfi-Steinitz, and Ruth Ronen. The court noted that since the state adopted the petitioners' stance and took practical steps to implement the policy, the petition became moot and no concrete dispute requiring judicial intervention remained. However, the court refrained from ruling on the legality or correctness of the new policy, stating that challenges to it could be addressed in separate petitions by affected parties. The court ordered the petition dismissed without costs, preserving all parties' claims.