Eytan Sheshinski - Emil Salman
Eytan Sheshinski Photo by Emil Salman
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The Knesset yesterday approved the first reading of a bill to implement the Sheshinski Committee recommendations on raising taxes on oil and natural gas production.

The vote was 36-8, with one abstention. Seven MKs from the Yisrael Beiteinu party opposed the government-sponsored bill, and the abstention also came from a coalition member, Nissim Zeev (Shas ).

Yisrael Beiteinu was supporting fellow party member and Infrastructure Minister Uzi Landau, who opposed raising taxes on profits from exploiting Israel's natural resources. Prime Minister Benjamin Netanyahu is not expected to take any action against the coalition MKs who opposed the bill.

Finance Minister Yuval Steinitz explained the proposed law to the Knesset plenum before the vote. The Sheshinski committee, headed by economist Prof. Eytan Sheshinski, examined Israel's fiscal and tax policy on natural resources, and concluded that taxes on profits from oil and gas production should be 52% to 62%, he said.

The law will not apply retroactively, Steinitz stressed, adding that the bill would be prepared quickly for its second and third readings.

Next week, the Knesset House Committee will hold a special session to decide which committee will prepare the bill - the Finance Committee, the Economic Affairs Committee or a joint committee comprising members of both.

Steinitz said this Knesset and government would not see any major results from the bill, but the additional revenues would become significant in about 2015, and for about 30 years thereafter. "We are talking in total about 30 to 40 years, and an addition of NIS 1 billion [a year]," Steinitz said.

"The annual amount will not change the world, but altogether, it is an enormous sum that can serve education, welfare, defense and the entire Zionist endeavor," he continued. "Our children and maybe our grandchildren will benefit."