High Court upholds Sheshinski law on oil, gas tax

August 15, 2012 16:26

The High Court of Justice rejected petitions by two oil and gas exploration firms against the so-called Sheshinski Law Wednesday, upholding the state’s right to increase its share of their revenues.

Isramco, a partner in the Tamar and Shimshon natural gas licenses, and Givot Olam, owner and operator of the Meged oil field license, led the petitions, arguing that the law would harm them retroactively. They pointed out that they obtained their property rights and made large investments before the government decided to establish the Sheshinski Committee.

Judges Miriam Naor, Uzi Vogelman and Zvi Zylbertal wrote in their ruling that as the law does not apply to previous revenue, it cannot be considered retroactive. They explained that although the petitioners began investing before the new law was passed, tax rate amendments are “a common legislative scenario.”

“This law does not contradict Israel’s values as a Jewish and democratic state. With regard to property rights, no disproportionate harm has been done,” the judges summarized.

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