Students, MKs blast scholarship tax clause

Kadima official, Yohanan Plesner, calls on cabinet secretary to act like public servant, to stop taking part in spin doctoring for PMO.

November 2, 2010 19:57
2 minute read.
Students protest yeshiva stipends in Jerusalem

Student Protest 311. (photo credit: Marc Israel Sellem)


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`Students and MKs spoke out on Tuesday against government efforts to slip a tax on college scholarships into the arrangements law, with the Kadima Party calling for the cancellation of the addition.

Kadima Director-General Yohanan Plesner called on Cabinet Secretary Zvi Hauser “to act like a public servant and stop taking part in spin-doctoring on behalf of the prime minister’s bureau. The only solution to this saga is the absolute cancellation of the taxes on student scholarships.”

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For his part, Hauser accused Plesner of ignoring the facts, stating that only scholarships over NIS 90,000 would be taxed, and any scholarship totaling less than this amount would not be affected at all.

In response, Plesner said that “as usual, the prime minister’s bureau is doing what it does under pressure: spouting off lies.”

Plesner added that “the amendment to the arrangements law levies a tax on all scholarships from foreign sources and does not include any exemptions for scholarships totaling less than NIS 90,000 per year.”

The existence of the clause in question, #46 in the arrangements law, was announced by Kadima on Monday evening. The Prime Minister’s Office has announced that the clause would, in effect, cancel taxes on all scholarships less than NIS 90,000, and affix a 25% tax on those greater than that sum.

Knesset Education Committee head Zevulun Orlev (Habayit Hayehudi) called for the permanent cancellation of the clause, saying that “the attempt to hide this clause within the arrangements law shows its weakness. Someone in the Finance Ministry understood that this clause would not be passed as a bill on its own.”

National Student Union head Itzik Shmuli said that while he understood why the government would want to avoid a situation where people use “scholarships” to pay salaries to workers, “it must be stipulated that scholarships from outside sources will not be subject to tax, with no room for interpretation.”

News of the scholarship tax clause emerged Monday night while nearly 10,000 students were holding a mass protest in Jerusalem against the Knesset’s approval of stipends for married full-time yeshiva students.

Held under the banner “We’re not suckers,” the demonstration was part of a series of protests launched by students across the country over the past week against the supplements.

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