State says ICL may owe more in royalties
Does Israel Chemicals owe the state money for unpaid royalties for the past 15 years?
Finance Minister Yuval Steinitz directed the accountant general and the Tax Authority to report how much ICL owes the state. The report is due within three weeks.
This is a follow-up to a 2006 report prepared by Barlev Investigative Auditing, which found that ICL did not pay the state the full royalties owed for 2003 to 2005 because the company had changed its reporting methods. ICL rejected the finding, saying it was a disagreement over the legal interpretation of its permits.
The state may demand that ICL pay royalties retroactively for its potash mining. The report may also examine the 1995 agreement ICL struck with the state shortly before it was privatized. ICL is now controlled by the Ofer family.
ICL is supposed to pay the state 5% of its revenues from its sales of natural resources. As part of the 1995 agreement, that figure may be open to reevaluation in 2010 regarding production of potash beyond a 3-million-ton cap. Royalties for potash produced beyond that 3 million may be set at no more than 10%.
Such a change could bring the state another $27 million annually.