MK Khenin: Full royalty rates must be applied to downstream products and not just to the mineral resources

Imposing a surtax of 42 percent on the excess profits of natural resource exploiters would boost the state’s coffers with NIS 500 million annually, an inter-ministerial committee concluded on Sunday. The Sheshinski 2 Committee, headed by Prof. Eytan Sheshinski, was tasked last year with examining the state’s royalty policies for the exploitation of natural resources – except for oil and gas, whose royalty policies were determined in the first Sheshinski Committee.


MK Dov Khenin (Hadash) criticized the 42 percent surplus profits tax rate as extremely low. “The Sheshinski 2 Committee published conservative conclusions that still do not reflect a full share of natural resources for the public and in fact allow the continued abuse of the Dead Sea and other natural resources,” said Khenin. He also criticized the committee for neglecting to develop a mechanism to monitor and impose a unique taxation on exports of natural resources, which would ensure that the state receives proper taxes and full information on the natural resources sector. Khenin said that full royalty rates must be applied also to downstream products, not just to the mineral resources. A portion of all the proceeds that the public receives from natural resource development should be designated for environmental technology research purposes, in order to decrease dependency on such resources, Khenin added.