Rabbi Ovadia’s Son Ordered to Pay 19 Million Shekels in Taxes

Rabbi Moshe Yosef tells Tax Authority that funds in his accounts are for charity purposes, and therefore tax-exempt.

The late Rabbi Ovadia Yosef, wearing his customary dark glasses and black robe with gold brocade.
Olivier Fitoussi

The Israel Tax Authority is demanding that Rabbi Moshe Yosef, son of the late Rabbi Ovadia Yosef, make an immediate payment of 19 million shekels ($4.86 million) in taxes for funds he is holding in his personal accounts, according to a Channel 2 news report Sunday night.

Yosef’s lawyer, Israel Bach, however, said that funds in those accounts are used for charity and are thus not subject to tax.

Moshe Yosef, the late rabbi’s youngest son, runs the Beit Yosef kashrut organization, a kollel and various other activities. The tax authority is basing its demands on funds Yosef holds in his personal accounts in the Kiryat Moshe branch of First International Bank of Israel.

Bach, however, claims that the money serves for “activities in the realm of charity and interest-free loans, which were launched by Rabbi Ovadia Yosef and managed by his son. These activities are well known and cannot be denied, and many poor people benefitted from them. By law, charity activities are not subject to tax, and thus were not taxed for years although the authority knew about them.”

Bach added that, “The sum that you cite is the total volume of loans and repayments made by the free loan fund, while the principal is only a few percentage points of the total activity. This sum also includes interest that been accruing for more than 16 years. Moreover, just recently the Tel Aviv District Court ruled in the case of Nahum Yehuda Pollak that someone who made his account available for use by a free loan fund cannot be seen as the owner of the funds and cannot be taxed on them.

“Since these activities are clearly documented, and the matter is going to be reexamined by the tax authority when all the facts are given to them, we believe it will turn out that there will be no tax liability imposed for these activities.”

The Israel Tax Authority said, “We are not responding to this matter because of the legal requirement of confidentiality.”