Israeli Tax Authority Threatens Over 1,000 Yeshivas With Loss of Tax Benefits Over Draft Evasion

The Israeli Tax Authority has issued warning letters in recent weeks to more than 1,000 ultra-Orthodox yeshivas, threatening to revoke their tax-exempt status under Section 46 of the Income Tax Ordinance if they fail to declare that none of their students are draft evaders refusing to enlist in the Israel Defense Forces (IDF). The letters demand that yeshivas submit by October 11, 2026, a signed declaration and a list of all students with their ID numbers, confirming that none have refused military service. Failure to comply will result in immediate loss of tax benefits for donors, which could severely impact yeshivas’ budgets that rely heavily on donations with significant tax deductions.

This move follows a November 2025 Supreme Court ruling mandating the state to enforce IDF enlistment among yeshiva students and to cease funding those who have not regularized their military status. The ruling also signaled the withdrawal of hundreds of millions of shekels in state support, including indirect benefits such as tax exemptions. Government legal advisor Gali Baharav-Miara instructed relevant ministries to prepare for the immediate drafting of 3,000 ultra-Orthodox men and to avoid any financial support that could indirectly encourage draft evasion.

Under Section 46, donors who contribute over 200 shekels to approved public institutions receive a 35% income tax credit. The Tax Authority’s letters emphasize that no benefits should be granted to institutions harboring draft evaders, stating, "There are no benefits for evasion." The declarations will be cross-checked with IDF records to verify compliance.

The number of yeshiva students has risen sharply in the past decade, with 43,427 unmarried students and 101,640 married students in 2022, a 41% increase since 2012. Despite this growth, yeshivas have faced budget cuts, and the loss of tax benefits could further reduce enrollment. The Tax Authority has already denied tax benefits to 300 yeshivas suspected of harboring draft evaders and is now targeting those currently benefiting from the tax breaks.

Before any final decision, institutions will have the opportunity to respond and appeal. This enforcement action reflects the government's broader effort to ensure compliance with military service obligations among the ultra-Orthodox community.