Zim investors: Why do Teva and Intel pay under 10% tax?

Eli Glickman Photo: Itay Rappaport

Eli Glickman says he is proud to pay 23% tax and be the country's biggest ever taxpayers, but his investors ask if it is fair that others pay much less.

Zim Integrated Shipping Services Ltd. (NYSE: ZIM) expects that its financial results in 2022 will be similar to 2021, according to CEO Eli Glickman.

He said, "There is one difference, we are going to pay tax this year of 23%."

This compares with a tax rate of 17% that the company paid in 2021 because of accumulated losses in the past.

"In practice we have a new partner in the company - the State of Israel" Glickman added. "This year part of the improvement in the state's revenues is from Zim. We have paid about $1 billion tax. We are patriotic Zionists and want to expand our activities in Israel, and not reduce them."

"Globes" recently revealed that Zim, which became a profitable company in 2021, after many years of heavy losses, contacted the Israel Tax Authority and asked to implement changes in the tax regime that it pays, so that it could save hundreds of millions of shekels in payments into the state's coffers from its profits.

Zim wants corporation tax, which amounts to 23% of its profits, to be replaced by tonnage tax, derived from the volume of shipping, and which is significantly lower. Zim, it was reported, was even threatening that if its demands were not met, then the company would transfer its assets abroad.

Glickman said, "We are proud to be the biggest taxpayers ever in Israel from our routine operations. We are not engaged in changing the taxation method. We did have contact that was meant to be secret with the Tax Authority, which leaked. We did not initiate tax handling but we do represent our investors and we were asked questions on 'how it could be that a company like Teva pays less than 10% taxes, and Intel less than 10% taxes, and earn grants worth billions, and why we have to pay billions in taxes in dollars and compete with companies abroad that pay tonnage tax, and for the sake of comparison pay 4% tax."

Published by Globes, Israel business news - en.globes.co.il - on March 10, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Eli Glickman Photo: Itay Rappaport
Eli Glickman Photo: Itay Rappaport
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