A Finance Ministry representative told the Knesset committee Sunday that maintaining the reserve force at current levels could cost tens of billions of shekels annually in the coming years, and that a future tax increase may be necessary given expected demographic changes. The warning was in response to a question from MK Meir Cohen about the potential fiscal impact of the Basic Law: Torah Study.
In a Knesset Economic Committee hearing Sunday afternoon, a Finance Ministry representative warned that maintaining Israel's reserve forces at current levels will cost tens of billions of shekels annually in the coming years, and that a future tax increase may be necessary given expected demographic changes. The warning was given in response to a question from MK Meir Cohen (Yesh Atid) about the fiscal implications of the proposed Basic Law: Torah Study, which would equate Torah study with military service and further strain the conscription pool, increasing the burden on reservists.
This is the latest in a series of warnings from the Finance Ministry today. Earlier Sunday afternoon (13:49 Jerusalem), the ministry warned that the Basic Law would force a 16% tax hike, and its legal counsel warned of harm to equality and budget priorities. The ministry also estimated the cumulative cost of reserve duty since the war began at NIS 170 billion. On July 2, the IDF warned that without legislative fixes to extend mandatory service, the reserve burden would continue through 2027, and the Finance Ministry separately threatened a 4.5% VAT hike if the defense budget received a 30-billion-shekel boost.
The warnings come amid ongoing debate over Haredi conscription and the proposed Basic Law, which would exempt yeshiva students from military service. As The Zioneer reported, Finance Minister Bezalel Smotrich said on June 20 he hopes the Haredi public will make a "correction" on enlistment, and an army representative told the Knesset on June 30 that arrests and detention are necessary to enforce the conscription law.
The Finance Ministry did not specify a tax rate or timeline for the potential increase. The 16% tax hike figure from earlier today is specifically tied to the Basic Law, while the committee warning links reserve costs to demographic changes rather than the law alone.
6 developments
- StrongPublic anger grows as Finance Ministry warns Torah-study law would force 16% tax hike
- DevelopingTreasury official: cumulative cost of reserve duty to Israel's economy estimated at NIS 150 billion (2023-2026)
- DevelopingIsrael's Defense Ministry seeks 40-50 billion shekel annual budget increase
- DevelopingIDF warns of continued reserve burden unless service law is fixed
Source and signal
- Internal intake