PM faces Likud mutiny over Sheshinski recommendations

Knesset Economics C'tee head confirms report he is only Likud MK on Knesset Finance Committee who supported his committee’s recommendations.

March 17, 2011 01:19
2 minute read.

CARMEL SHAMA-HACOHEN 58. (photo credit: Ariel Jerozolimski)

Prime Minister Binyamin Netanyahu has called passing the recommendations of the Sheshinski Commission on taxation of gas resources his top parliamentary goal, but the MKs in his Likud faction apparently are not behind him.

Knesset Economics Committee head Carmel Shama-Hacohen confirmed a Channel 2 report Wednesday night that he was the only Likud MK on the Knesset Finance Committee who supported his committee’s recommendations.

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Commentary: The moral aspect of the Sheshinski report

Sheshinski recommended taxing energy companies harvesting gas found off Israel’s coast by 50 to 60 percent, which Finance Minister Yuval Steinitz has said is below-average for countries.

The recommendations passed by a wide margin in the Knesset plenum last month, but are facing a tough test in a Finance Committee vote set for next Wednesday before they can be brought to a final vote in the plenum.

Likud MKs Tzion Pinyan, Miri Regev and Haim Katz oppose the so-called Sheshinsky Bill despite the firm backing of Netanyahu and Steinitz.

Katz will have to be replaced on the committee because of his ties to gas companies, but there might not be a Likud MK willing to take his place and vote for the bill, in part because of strong pressure from lobbyists.

Netanyahu has told the Likud Knesset faction on multiple occasions that the taxes are needed to provide a boost of billions of shekels for education and welfare. He has urged the MKs to pass the bill as soon as possible.

But in another challenge, Finance Committee chairman Moshe Gafni (United Torah Judaism) announcing on Wednesday that he opposed the Finance Ministry’s plan to cancel a tax write-off for the companies working the gas fields.

Representatives of the companies told the committee on Wednesday that even if the Sheshinski Bill passed, it would be overturned by the High Court of Justice. Attorney Yehuda Ressler, who represents the companies, expressed confidence that the court would find that the government was hurting them disproportionately.

Labor MK Shelly Yacimovich meanwhile submitted a bill Wednesday that would form a fund for long-term investments from revenues from natural resources that would be managed by the Bank of Israel.

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