Haredi Donors Petition Israeli Supreme Court to Reinstate Tax Benefits for Yeshiva Contributions
Several wealthy Haredi donors who regularly support yeshivas have petitioned the Israeli Supreme Court to reinstate Section 46 of the Income Tax Ordinance, which allows donors to registered nonprofits to receive tax deductions for their contributions. This provision has historically encouraged philanthropy by enabling donors to present receipts to the Tax Authority and obtain tax relief proportional to their donations.
Recently, following instructions from the State Attorney and with the Supreme Court's consent, the Tax Authority froze this section for donations to yeshivas that include draft-dodging students who have not regularized their status. The petition, filed by attorney David Shuv, challenges the legality of using Section 46 as a regulatory enforcement tool to promote military service policy, arguing that the law’s purpose is to encourage philanthropy, not to serve as a means of coercion or policy enforcement.
The petition also criticizes the State Attorney’s Office for overstepping its authority by effectively creating an alternative enforcement mechanism within the Justice Ministry, bypassing the Finance Ministry and the Tax Authority. It rejects the legal rationale used to justify the freeze, stating that the concept of "mirror image" cited by authorities has no basis in tax or administrative law.
The petition warns that the freeze harms not only draft-dodging students but also compliant donors, students with regularized status, staff, and the broader public benefiting from these institutions. Eli Plai, publisher of Mishpacha magazine and chairman of the Plai Foundation, condemned the move as crossing red lines and turning philanthropy into a punitive tool. Attorney Shuv expressed confidence that the court will overturn the directive, emphasizing that the ends do not justify unlawful means.
Separately, about two weeks ago, the organization "Emet LeYaakov BeYisrael" and accountant Chani Teitelbaum petitioned to cancel the administrative freeze, arguing that if military service conditions are imposed on tax benefits, they must be applied equally to all educational and cultural institutions, including universities, colleges, sports, and cultural bodies, to avoid discriminatory treatment.
