The escalating conflict with Hamas in Gaza has already caused NIS 10 million in property damage, and shuttered businesses across the South.
The Israel Tax Authority has received 99 claims for property damage related to the conflict (35 vehicles, 52 buildings, 12 agriculture-related) since Saturday.
According to the Federation of Israeli Chambers of Commerce, most businesses in Ashdod, Ashkelon, Sderot, Netivot, Ofakim, Rahat and Beersheba are either just working part-time or closed altogether, both because of security concerns and a lack of customers. The Economy Ministry said sales in the region were down, creating a cash flow problem for many businesses.
Economy Minister Naftali Bennett called on the Finance Ministry to ease the burden on businesses by postponing the collection date for VAT, income tax and national insurance by a week, until the 15th of the month.
“Beyond the security actions, it is our duty to ensure the continued economic strength of businesses in the south and ensure they will not be harmed as a result of the situation,” Bennett said.
FICC president Uriel Lynn echoed Bennett’s call, and requested banks to be more flexible with businesses in the South during this challenging time. Instead of returning a bad check straight away, he urged they should give businesses a little more time to deposit their funds.
The Economy Ministry issued guidelines for how to deal with employer-labor disputes that may arise during the conflict.
A worker, for example, cannot be fired for failing to show up for work because of following Home Front Command guidelines. Employers must pay workers regular wages even if the business is closed, and can later apply for compensation from the government.
The Manufacturers Association of Israel set up a special “war room” for the roughly 500 factories operating within a 40 km. radius of Gaza. It will be open 24 hours a day to provide support for factories with problems that may arise as a result of the fighting, such as taking a direct hit from a missile, needing to work in a special “emergency” mode, shortage of workers, power outages, shortage of raw materials, and disruptions to manufacturing and transportation.
The association will also collect data on production, damage, and factory closures to provide to local and national authorities.
While the stock market, bond market, and exchange rate are expected to take a dive during the conflict as well, experts note that Israel typically rebounds from such setbacks quickly.
“Based on past experience, we can see that because of the psychological ‘fear factor,’ the capital markets usually overreact, but in examining similar events, it goes up once the dust settles and the panic subsides,” said Uri Greenfeld, chief economist at Psagot Investment House.
Property damage can be reported to (08) 662-3300. The public and business owners can address questions to the Economy Ministry at 1-800-201-180.
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