Small investors in oil and natural-gas exploration shares and holdings on
Tuesday officially launched a media campaign against the Sheshinski Committee’s
recommendations to raise taxes on gas and oil profits.
“The public is the
real investor – that is the average Israeli investor, not wealthy tycoons – who
are also the ones who will be hurt most by higher taxes on oil and gas profits,”
Motti Morell, a media advisor who is heading the media campaign, said Tuesday at
a press conference in Tel Aviv. “About 70 percent of the holdings in the gas and
oil sector are in the hands of the public.”RELATED:BIRD Foundation invests $5.4m. in Israel-US projectsExport leaders honored at Beit HanassiHoteliers had great 2010, but wary of future
The small investors who have
invested in Givot Olam, Isramco, Ratio Oil Exploration and other companies have
in recent weeks started to wage an aggressive campaign on the Internet and other
media claiming they will be left with almost nothing if the Sheshinski
Committee’s recommendations to raise taxes on gas and oil profits are adopted.
About NIS 500,000 has already been raised through donations via the Internet to
fund the campaign, Morell said, adding that the group expects to raise more than
NIS 1 million for the campaign.
The Sheshinski Committee recommended to
levy a progressive tax on part of the gas and oil companies’ profits. The
tax would be levied on the profit made by all the gas and oil companies actively
exploiting natural resources, after they recouped 150% of their investment on
the projects. The tax rate would range from 20% to 60%, depending on the volume
of the profits.
“Fifteen years ago, we started to invest money in Givot
Olam and other gas shares out of Zionist reasons,” said Shoshana Weinberger, a
Holocaust survivor, who was among four small investors who spoke at the press
conference. “We hoped that after a long period, during which we invested
and suffered great losses, we would finally bear the fruits of success.
Unfortunately this hope is now being buried because of the Sheshinski Committee.
The committee is unilaterally recommending a tax reform and a change in the
profits of small investors.”
Also speaking at the conference, Ehud Shlush
said he had invested in Givot Olam in the past and lost close to NIS
“Throughout the years, the government didn’t want to invest
because they didn’t believe in any finds after many failures, and instead the
public had to risk their money,” Shlush said. “After a long break, I decided to
join Isramco and invest in other gas and oil shares as a long-term investment. I
invested because I am self-employed and don’t have a pension fund. I was hoping
that the part of the profits generated from the gas finds would turn into my
Oil and gas exploration firms are organized as general
partnerships, while small investors have bought participation units or limited
holdings in the partnerships, or shares.
Morell said the gas tycoons, who
are general partners, would not be hurt by the Sheshinski Committee’s
recommendations because they will get their percentages from agreements between
the partnerships, or get their shares out of the revenues, only thereafter taxes
and expenditures are subtracted.
“There is a conflict of interest between
small investors and companies,” he said. “The recommendations of the Sheshinski
Committee will do great damage to everyone. They are a mistake.”
Monday, MK Shelly Yacimovich (Labor) criticized the small investors’ media
campaign, saying their investments in the gas and oil sector were as
irresponsible as betting in a casino.
“If people put money intended for
their children’s future in the riskiest stocks on the Tel Aviv Stock Exchange,
they are abandoning their responsibility toward their children,” she wrote in a
blog. “The question is who is behind these small investors who advertise big
announcements costing hundreds of thousands of shekels.”