The State will receive 45%-57% of the profit for extracting potash from the Dead Sea and phosphates from Negev mines, reports "Yediot Ahronot." These recommendations will be presented to the minister of finance by the Sheshinski 2 Committee in the coming few days.
The committee will recommend setting a unified scale of royalties and taxes for all types of quarries so that the overall size of the government's take will be identical without dependence on the size of royalties in each individual mine.
To date the State's royalties on natural resources were based on low royalties and companies tax. The root of the low royalties was historic from when most mining and quarrying companies were government owned, and so from the state's point of view it was simply a matter of passing money from "pocket to pocket." However, since most companies have been privatized, the picture has changed.
The committee will not recommend charging royalties on mineral waters, and at the present stage, there is no recommendation to increase taxes and royalties on quarrying materials such as sand and gravel.
The main recommendations effect Israel Chemicals Ltd. (TASE: ICL), which has petitioned the court to require the government to conduct arbitration regarding Dead Sea mineral extraction. Israel Chemicals claims that the government is not entitled to unilaterally change the agreement with the company.
A source at Israel Chemicals said, "We are already paying 50% more than in all other countries."
Published by Globes [online], Israel business news - www.globes-online.com - on May 8, 2014
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