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Intel Corp. has filed an administrative petition against the retroactive demand of NIS 60 million in arnona payment that the municipality of Kiryat Gat claims the chipmaker withheld over the past seven years.
Kiryat Gat has accused Intel Israel of purposely preventing officials from entering its premises to take exact area measurements for arnona calculation and, as a result, has dodged city tax payments.
"Over the past seven years, Intel has prevented us from entering the chipmaker's factory for the purpose of taking measurements. A recent estimation revealed that Intel had evaded arnona payments of NIS 60m as a result of additional plot," the municipality said in a statement.
According to the municipality, several attempts to enter Intel's FAB 18 plant, which employs several thousand local employees, were blocked since Intel finished building the plant in 1998. Only at the end of August 2005, after the municipality filed a police complaint, were measurements of the plant's area taken.
The Kiryat Gat report also found that in the past six years, Bank Discount had been operating a counter inside the Intel plant. The counter provides basic banking services on a 12 square meter area, about which neither the chipmaker nor the bank had informed the municipal authorities.
Following the NIS 60m. claim, Intel filed a petition to the Beersheba district court on Sunday to demand a delay of the requested payment.
"Intel cannot comment on a pending legal matter. However, we want to emphasize that the company's excellent relations with the Kiryat Gat municipality and the community in the city will be preserved, irrespective of the legal dispute," Koby Bahar, Intel's spokesperson told The Jerusalem Post.
Until Intel allowed it measure the plant, the city argued that it had to rely on the company's own estimates of the plot for the purpose of setting tax. That number was provided to the municipality in 1998.
According to sources close to the matter, Intel Israel currently pays the city of Kiryat Gat, annual arnona of NIS 12m. Further, the current dispute is understood to be over disagreements regarding the city's calculation of the property tax in terms of the definition of the different area uses.
Separately, Baran Group on Sunday said it won a $100m. construction project for Intel in Kiryat Gat. Baran will build offices and parking facilities for Intel's expanded compound in the southern city. The complex will have 70,000 square meters tailored for administrative space next to the chip plant.