The Finance Ministry warned Sunday that passing the Basic Law: Torah Study, which would codify military-service exemptions for yeshiva students, would necessitate a 16% across-the-board tax increase to cover resulting revenue shortfalls and defense costs. The estimate escalates the fiscal face-off between the Treasury and ultra-Orthodox coalition partners, following a Sunday warning that maintaining current reserve-force levels could cost tens of billions annually.
The Finance Ministry’s latest assessment—that the proposed Basic Law: Torah Study would trigger a 16% tax increase—represents the sharpest fiscal warning yet in the intensifying budget battle over military service exemptions for yeshiva students. The figure, released Sunday afternoon, was quoted as the Treasury’s own calculation of the direct and indirect costs of enshrining broad exemptions into basic law, including lost tax revenue and the added burden of financing an expanded reserve and defense system.
As The Zioneer reported earlier Sunday (16:31 Jerusalem), a Treasury representative had already told the Knesset that maintaining current reserve-force levels in the coming years could require tax increases down the line, citing demographic pressures. The 16% estimate appears to subsume those long-term reserve costs as well as immediate revenue forgone from draft-eligible yeshiva students who would remain outside the workforce under the proposed law. Earlier background context also notes that Finance Minister Bezalel Smotrich has opposed the Basic Law bill; this latest Treasury calculation sharpens that internal coalition divide.
The warning comes amid a broader anti-crime and corruption debate, with the Finance Ministry also tracking the 23 billion shekel annual cost of protection rackets—the so-called 'quiet terror tax'—though the two issues remain administratively separate. The tax-hike figure has not been independently verified; the Treasury's internal methodology has not been published.
2 developments
- DevelopingSmotrich attacks his own ministry's legal adviser over Torah-study Basic Law cost estimate
- StrongFinance Ministry warns reserve costs could force future tax increases
- StrongSmotrich opposes ultra-Orthodox Torah-study Basic Law bill
- DevelopingState urges High Court to strip tax benefits from yeshivas housing draft dodgers — analysis reveals 430M shekel annual savings
Source and signal
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