Comptroller Englman: Why is there a 25% tax on payments for reservists' wives?

State Comptroller Matanyahu Englman addressed Finance Minister Bezalel Smotrich and Defense Minister Yoav Gallant with a request to examine why the Reserve Servicemen's Assistance Fund deducted 25% of the compensation paid to spouses of reservists in taxes on Monday.

The letter was sent during an audit on the topic of the rights of reservists and their families following an appeal by the Reservists' Wives Forum. The audit department in the State Comptroller's Office attempted to clarify with the relevant authorities why there was no coordination with the Tax Authority.

So far, no answers have been received. Comptroller Englman noted in his letter that the audit raised two concerning issues, including the 25% tax on the payments to reservists, which makes it very difficult for spouses to receive a tax refund, given that the tax calculation is usually made for each spouse separately.

The letter stated, "To prevent economic harm to reservists and their spouses, it is recommended that the Tax Authority issue guidelines to the Aid Fund to regulate the tax aspects of the compensation payments for loss of income to the spouses of reservists, including compensation already paid to those entitled to it. It is proposed that these guidelines include, among other things, instructions on how to attribute the compensation income between spouses, calculate the tax liability and the applicable withholding rules."

Englman said in the letter, "Compensation to spouses is an obligation of the state towards the families of reservists, who, in addition to being willing to risk their lives, also bear a heavy economic burden. It is inconceivable to apply a sweeping 25% tax deduction without coordinating with the Tax Authority. Reservists protect us. It is our duty to protect them and their families."

Response by leader of Reservists' Wives Forum

Shagit Beckner, a leader of the Reservists' Wives Forum, added, "For months, we have been warning that there is no logic in imposing a tax, especially an obscure and excessive tax, on the families of reservists -- a group that already bears the full burden of the state's defense. In fact, the same hand that drafts our husbands for reserves in the second and third rounds also collects a tax from us for our significant occupational impact due to their absence. We thank the State Comptroller and all those involved for their willingness to correct the injustice. The enlisted families need to be protected so they can continue to protect all of us."