Israel expects to receive NIS 22 billion in royalties on the production of its natural resources in the coming decades, according to the Accountant General's reports. The chief source of royalties is obviously the natural gas reservoirs. The natural gas developers are obligated to pay the state a 12.5% royalty rate on sales from the gas reservoirs, amounting to a projected total of NIS 17.477 billion. This amount does not include the expected revenue from taxes on the gas developers' profits, headed by the Sheshinski tax.
In order to calculate revenues from gas royalties, the Accountant General assumed that all 251 BCM of gas from the Tamar reservoir would be sold by 2041 (not including Tamar SW). He also assumed that 354 BCM of gas from the Leviathan reservoir would be sold in 2020-2065, amounting to over 50% of the quantity of gas likely to be found in Leviathan.
In addition to the gas reservoirs, the Accountant General also assumed NIS 3.286 billion in revenue from taxing sand and gravel quarries and NIS 1.3 billion in revenue from the sales of natural phosphate and potash quarries at the Dead Sea. As part of the adoption of the Sheshinski 2 Committee recommendations, it was decided to reduce the royalty rate on these quarries to 5%. As with gas, the amount of royalties on natural quarries at the Dead Sea does not take into account the additional revenues from excess profits tax imposed on the quarry producers.
Published by Globes [online], Israel Business News - www.globes-online.com - on August 21, 2017
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