Sheshinski legislation reaches Knesset

Steinitz: "It’s immoral that Israel’s residents should not benefit from their oil and gas."

By OMER RABIN/GLOBES
Sheshinski and Steinitz 311 (photo credit: Marc Israel Sellem)
Sheshinski and Steinitz 311
(photo credit: Marc Israel Sellem)
The Knesset Finance Committee on Wednesday began discussing the Sheshinski Committee’s recommendations for increasing government royalties on oil and gas finds.
Finance Minister Yuval Steinitz, Sheshinski committee chairman Prof. Eytan Sheshinski, Israel Tax Authority director-general Yehuda Nasradishi, Finance Ministry director-general Haim Shani, National Economics Council chairman Eugene Kandel, Knesset Economic Affairs Committee chairman Carmel Shama-Hacohen (Likud) were among those attending the session.
At the start of the meeting, Finance Committee chairman Moshe Gafni (United Torah Judaism) thanked Steinitz for coming to the discussion.
“This discussion has taken the Israeli public by storm,” he said. “People have invested a lot of money to find gas, and we thank G-d that gas was found, because it puts Israel in a different position. Conditions are already good, but this puts us in a different position in the coming years, and the importance of the matter is very, very important.”
“My position is that this resource belongs to the country’s citizens,” Gafni said. “However, we must not harm those who invested their money and initiated the exploration.”
Steinitz reviewed at length the preliminary research that the Finance Ministry conducted before it appointed the Sheshinski Committee and the recommendations were published.
“The results astounded me at first,” he said. “We discovered that Israel’s tax rate on its natural resources is among the lowest in the world, which is why we decided to appoint a serious expert committee on the issue to normalize Israel’s condition to that of other countries.”
Comparing the situation in Israel to that of other countries, Steinitz said, “It is immoral that Israel’s residents should not benefit from their oil and gas, because this would mean that, as of 2016, beyond a company tax of 18 percent, there is essentially nothing.
There are royalties, but they are almost completely offset because of the odd clause, which exists only in Israel, and is called the depletion allowance.”