The Religious Zionist Party (RZP), led by Finance Minister Bezalel Smotrich, announced on Wednesday that it would halt its participation in coalition votes until Smotrich’s bill to provide reservists with tax credits was passed.
“Against the backdrop of Likud’s refusal to advance Smotrich’s bill to provide tax benefits for reservists, the Religious Zionist Party will not vote with the coalition until the law granting tax benefits to reservists is approved in its second and third readings,” the party’s statement read.
The bill has been under discussion in the Knesset’s Finance Committee but has not yet been brought for its second and third readings, which are necessary for it to pass into law.
It proposes granting tax credit points to reservists who meet the specific requirements.
Coalition whip Ofir Katz (Likud) responded to RZP’s statement by raising issues with the bill. He said that the legislation “drastically discriminates against many reservists, especially students and low-income earners, who will not be able to benefit from the credit.”
“The goal of the bill is commendable, but changes are needed, and there is agreement on this among all members of the Finance Committee,” he added.
Katz then criticized Smotrich, saying that “it was regrettable that someone who, for three years, opposed ultimatums and boycotts, now acts in this way instead of resolving the issue, and refusing every compromise offered.”
“We aim to assist all reservists, not only those with high incomes. I support Finance Committee chairperson Hanoch Milwidsky [Likud] and the committee members in their just struggle,” Katz added.
Coalition lacks majority after haredi party exit
The coalition currently lacks a majority, as two haredi (ultra-Orthodox) parties resigned from the government in July in the fallout from negotiations over the controversial haredi conscription bill.
Under the bill’s proposal, the more days of service, the higher the tax benefit, with a ceiling of four credit points.
The proposal also states that a reservist who served 30-39 days in the previous year would be entitled to half a credit point; a reservist who served 40-49 days in the previous year would be entitled to three-quarters of a credit point; a reservist who served 50 days or more in the previous year would be entitled to one credit point.
Then, for every additional five days beyond the overall 50, an extra quarter credit point will be added, until the four credit point ceiling is reached.