A significant new economic measure affecting the Torah world is moving forward after Attorney General Gali Baharav-Miara directed government agencies to begin implementing a policy that will deny certain tax benefits to Torah institutions whose students are classified as draft-eligible and have not regularized their status with military authorities. At the same time, a special interagency task force will be established to prevent alternative funding channels from being used to circumvent the policy.

According to a statement issued following a meeting chaired by the attorney general, the government determined that under existing law, Supreme Court rulings, and decisions relating to the economic enforcement of military service obligations, “it is not possible to indirectly fund Torah institutions in which draft evaders are studying through the tax benefit provided under Section 46 of the Income Tax Ordinance.”

Under the new directive, the Israel Tax Authority must publish an official notice outlining the policy change by June 7, 2026. The announcement will detail the revised eligibility requirements, the documentation institutions will be required to submit, and the deadlines for doing so.

The new policy will require Torah institutions seeking either a new Section 46 approval or a renewal of an existing one to certify that their students have arranged their status with military authorities. In addition, institutions will be required to provide student information, including identification numbers, so that records can be cross-checked against military databases.

Organizations that already possess Section 46 approval will also be affected. The Tax Authority is expected to contact those institutions by July 1, 2026, requiring them to submit the necessary documentation in order to maintain eligibility for the tax benefit.

The decision further states that institutions that fail to provide the required information, or whose eligibility is not approved by the Tax Authority, will lose their tax-benefit status.

In addition, the attorney general ordered the formation of a special interministerial committee headed by the Deputy Attorney General for Public-Constitutional Law. Representatives from the Tax Authority, the Budget Department, the Corporations Authority, and the Justice Ministry will participate in the effort.

The committee’s mission will be to develop procedures designed to prevent the creation of indirect funding mechanisms for institutions whose students are draft-eligible but have not resolved their military status.

The decision also referenced a Supreme Court ruling issued in April, which stated that “the creation of alternative funding channels contradicts the court’s ruling and directly undermines the government’s obligation to enforce the provisions of the Security Service Law.”

{Matzav.com}