The Justice Ministry agrees with the Tax Authority that if working parents can claim childcare costs as a tax deduction, then transportation costs for childcare workers are tax deductable, too.
This comes after the Supreme Court ruled childcare costs should be tax-deductable.
Tax officials said the ruling would cost between NIS 5 billion and NIS 7 billion a year, and are hoping the Knesset will pass a law reversing the court's decision before next January.
Treasury officials say the childcare deduction alone will cost the state about NIS 2.5 billion, while the expanded interpretation of the ruling will cost another NIS 4 billion.
The Finance Ministry had hoped to legislate away the deductions through the Economic Arrangements Bill, which accompanies the state budget bill, but the item was removed due to opposition by Histadrut labor federation chair Ofer Eini.
Eini reportedly will not oppose a standard Knesset bill doing away with the deduction, but doesn't want his name connected with the matter, as it would be were it part of the arrangements bill.
A Histadrut spokesman explained that a law repealing the deduction deserves separate discussion by Knesset lawmakers, but refused to comment on the labor union's position on the matter.
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