The Knesset Finance Committee today began discussing the Sheshinski committee recommendations for increasing the government take from oil and gas revenue.
Minister of Finance Yuval Steinitz, Sheshinski committee chairman Prof. Eytan Sheshinski, Israel Tax Authority director general Yehuda Nasradishi, Ministry of Finance director general Haim Shani, National Economics Council chairman Eugene Kandel, and Knesset Economic Affairs Committee chairman MK Carmel Shama (Likud), among many others, are present.
At the start of the meeting Finance Committee chairman MK Moshe Gafni (United Torah Judaism) thanked Steinitz for coming to the discussion. "This discussion has taken the Israeli public by storm. People have invested a lot of money to find gas, and we thank God that gas was found, because it puts Israel in a different position. Conditions are already good, but this puts us in a different position in the coming years, and the importance of the matter is very, very important."
Gafni added, "My position is that this resource belongs to the country's citizens. However, we must not harm those who invested their money and initiated the exploration."
Steinitz reviewed at length the preliminary researc that the Ministry of Finance conducted before appointing the Sheshinski committee, and the publication of its recommendations. "The results astounded me at first. We discovered that Israel's tax rate on its natural resources is among the lowest in the world, which is why we decided to appoint a serious expert committee on the issue to normalize Israel's condition to that of proper countries in the world."
Comparing the situation in Israel to that of other countries, Steinitz said, "It is immoral that Israel's residents should not benefit from their oil and gas, because this would mean that, as of 2016, beyond a company tax of 18%, there is essentially nothing. There are royalties, but they almost completely offset because of the odd clause, which exists only in Israel, and is called the depletion allowance."
Published by Globes [online], Israel business news - www.globes-online.com - on March 9, 2011
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