(photo credit: Ariel Jerozolimski)
Kadima claimed its first victory over the budget on Tuesday when the Knesset Finance Committee voted to separate a proposed tax on students’ scholarships from the rest of the budget, effectively delaying and possibly preventing the initiative’s passage.
“This is an important victory for Kadima and a hard blow to the Netanyahu government’s cynical and heavy-handed attempt to tax students’ scholarships for the first time in the history of the state,” said Kadima spokesman Shmulik Dahan. “We in Kadima, who first revealed the government’s attempts to enforce this tax, now emphasize that justice has been done, and any attempts by the government to stick their hands into students’ and researchers’ pockets by way of the Economic Arrangements Bill will fail.”
The decision to separate the tax from the rest of the budget package came during a Finance Committee hearing Tuesday. Committee members expressed their anger that the Israel Tax Authority had planned to unilaterally place restrictions on sources of students’ grants, while justifying the restrictions on a concern that employees were essentially being paid illegally through tax-free scholarships.
Finance Committee chairman Moshe Gafni (United Torah Judaism) said that
he intended to space out the hearing, initially meant to be part of the
Economic Arrangements bill, in an attempt to allow for greater
discussion and examination of the subject and to ensure that students
and researchers are not critically harmed by the proposed tax.
Kadima MKs Yoel Hasson and Yohanan Plesner immediately backed up Gafni’s
decision, with Hasson proclaiming that “this is a moment of greatness
for the Finance Committee.”
Coalition member MK Zevulun Orlev (Habayit Hayehudi) backed up Plesner
and Hasson, protesting the proposal’s attempt to place restrictions on
who could and could not grant tax-free scholarships.
“It does not matter who gives the scholarship. What is important is who
receives it and for what goal – that should be the only criteria,” he
Orlev, who up until two weeks ago led the Education Committee, said that
such scholarships were critical in guaranteeing Israel’s continued
excellence in higher education and research. Israel, he chided, is still
behind other developed countries in providing benefits for students.
Any violation of the use of nontaxable scholarships, he said, should be
treated individually, through criminal prosecution for the guilty
“Nobody has any interest in allowing people to take advantage of the law
in the name of higher education, but the way that we are being asked to
amend the law will hurt research and academic excellence,” warned
The plan to tax students for up to 25 percent of certain scholarships
received has been a controversial issue since it was revealed as part of
the Economic Arrangements Bill two weeks ago. Removing the proposal
from the massive bill will undoubtedly make it harder for the government
to pass the plan – coalition discipline on the Economic Arrangements
Bill and the budget is much tighter than on individual legislative
initiatives, and so it is nearly impossible to strike down individual
With a strong cross-aisle consensus among the MKs at the hearing, Gafni
concluded that the topic of taxing scholarships was not urgent for the
government, and thus did not have to be passed within the framework of
the Economic Arrangements Bill. Instead, he argued, the issue could be
discussed at length in January after the committee completes its work on