The day before today's Knesset Finance Committee's scheduled vote on the Sheshinski legislation, Prime Minister Benjamin Netanyahu asked to link gas companies' profits to the company tax.
Intense negotiations with Ministry of Finance officials were held during the night, which is the main reason why the start of the Finance Committee's meeting this morning has been postponed to the afternoon, because the Knesset legal department has to approve the reword clauses of the bill.
Netanyahu is basically seeking to establish a mechanism which will offset any increase in the company tax rate with reduced government take on oil and gas revenues, and vice-versa.
Finance Committee chairman MK Moshe Gafni (United Torah Judaism) said today that clauses in the bill which give the Israel Tax Authority too much power could be amended. The implication is to Clause 16, which allows the Tax Authority to levy tax on oil and gas partnerships. This is a precedent-setting clause that contravenes the principle stipulated in the Partnerships Ordinance (New Version) (5735-1975) that taxes can be levied only on the partners in partnerships, but not on the partnerships themselves.
Yesterday, Netanyahu asked Likud MKs to support the Sheshinski committee recommendations to increase the government's take from oil and gas revenues. "I ask you to come tomorrow and not be absent, and to vote for the government's recommendations. The right thing to do is to get rid of the uncertainty and pass the Sheshinski committee decisions."
Published by Globes [online], Israel business news - www.globes-online.com - on March 23, 2011
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