Rocket attack March 9, 2012 (Eli Hershkovitz)
Remnants of rocket that exploded in southern Israel, March 9, 2012. Photo by Eli Hershkovitz
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Finance Minister Yuval Steinitz has issued an order to ensure that public-sector employees who stay home to care for children in the south will not be docked wages. Monday marked the fourth day of rocket barrages from Gaza, closing many schools near the Strip.

Steinitz also directed his staff to consider financial assistance to private-sector employees who had to stay home for the same reason; compensation might be provided to private employers, particularly small business owners and farmers.

Steinitz's move comes amid concerns voiced by local leaders that residents of the south might suffer wage losses due to the security situation. The recent events also force the Finance Ministry to consider how the state should treat losses suffered by businesses and residents if the authorities declare a state of emergency in the south or something similar.

Because of rocket barrages, the acting director of the Tax Authority, Doron Arbeli, granted residents of the south a five-day extension to March 20 to make a periodic tax payment. The order includes reporting and payment deadlines on value added tax, down payments of income taxes and payments on income tax withholding.

Natan Rosner, who heads the Israeli association of tax advisers, called on the Tax Authority to defer the March 15 VAT report for residents and businesses in the affected areas until the situation in the south calms down.

The Tax Authority beefed up its staff near Gaza to provide immediate responses to citizens whose property has been damaged by rocket attacks, but the extent of government compensation for indirect damage caused to individuals and businesses is less clear. Residents of communities near the Strip are already entitled to compensation for indirect damage due to rocket fire; for example, when the army orders farmers to keep their workers out of the fields.

The Tax Authority said compensation claims for indirect damage for the much wider area under rocket attacks is more complicated. Government compensation for such losses would require a declaration of a special situation or a state of emergency, as well as Knesset legislation.

As of press time, the Home Front Command has not instructed residents of the south to stop going to work, although many have had to stay home to take care of children whose schools or kindergartens are closed. When it comes to compensation for indirect losses, much depends upon how long the current situation lasts.

If experience in similar circumstances is a guide, the Tax Authority has a good system in place when it comes to direct damage to property. In the past, property-tax staff have been quickly sent to the field along with appraisers and engineers to collect information on damage in areas struck by rockets.

The teams have gone building to building discussing the right to compensation to anyone who suffered damage; they have also explained how to fill out claim forms. People in the south who have suffered property damage in the current round of rocket attacks may also call the Tax Authority at (08 ) 662-3300.

In the past, people with damaged homes were given the option of receiving a cash payment and having the damage repaired by their own contractors, or by workers provided through the Tax Authority itself. Compensation for damage to household effects has been based on a set price list. Reimbursement has not been provided for losses of cash, checks, jewelry or works of art.

In cases where the Tax Authority rules that a damaged item is not reparable, payment has included the cost of replacing it with a new item. But for damaged items owned by businesses, payment has been limited to its fair market value as a used item. Damage to inventory, however, has been compensated in full, although not the VAT on the goods.