Ex-treasury head fires back at firms' complaints
'The gas companies' arguments are baseless. You need to leave them with nice profits, and that's what the committee did. It even did more for them than other countries do,' says Prof. Avi Ben Bassat.
The gas companies' arguments against the Sheshinski committee's interim recommendations for the country's fiscal policy on natural resources are baseless and designed to pressure the country's politicians, former Finance Ministry director general Prof. Avi Ben Bassat said.
The committee led by Prof. Eytan Sheshinski released its recommendations last week. Ben Bassat called on Finance Minister Yuval Steinitz to have the companies start paying a proposed sector-specific tax after they earn back 120% of their investment, and not the 150% the committee set.
"The gas companies' complaints about the interim recommendations are for negotiating purposes," said Ben-Bassat. They're seeking to obtain a more favorable final report, he said.
The 150% floor is higher than what most countries charge companies exploiting their natural resources, he said.
"The gas companies' arguments are baseless. You need to leave them with nice profits, and that's what the committee did. It even did more for them than other countries do."
As for the companies' claims regarding the damage the committee's recommendations would cause them, he said. "The government gave them benefits larger than what it received back. From 2004 to 2009, the royalties were lower than the tax breaks for the gas companies."
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