Tax Authority to Yeshivas: Without Draft Dodgers, or You'll Lose the Tax Benefit for Donors

The Israel Tax Authority demands that yeshivas and religious institutions declare that they do not include draft evaders who have not regularized their status, and submit a full list of students. Institutions that fail to comply risk losing their Section 46 approval, which grants donors a tax credit. The move follows a petition by 'Israel Hofsheet' and the Attorney General's position.

The Israel Tax Authority sent a letter to yeshivas and religious institutions, setting new requirements for maintaining approval under Section 46 of the Income Tax Ordinance. This approval allows donors to receive a tax credit for their donations. Institutions are required to declare that they do not have students who were called for military service and have not regularized their status with the IDF, and to submit an Excel file with a full list of students and ID numbers. They must also commit not to accept future students in this status. The letter was sent last week and arrived today (Monday). The Tax Authority explains that it is not permissible to continue granting benefits directly or indirectly related to evasion of the draft obligation. An institution that fails to meet the requirements may lose its approval. The move comes after the High Court of Justice discussed a petition by the 'Israel Hofsheet' movement, which argued that the tax credit constitutes indirect public funding. The state adopted this position. Attorney General Gali Baharav-Miara determined that the state cannot continue to indirectly fund institutions where draft evaders study. Losing the approval could have significant financial implications, as Section 46 is a central tool for fundraising. The credit stands at 35% of the donation amount. The issue has led to a political confrontation: MK Moshe Gafni threatened to prevent the approval of hundreds of additional associations in protest.