Treasury denies reports of lowered gas profits outlook

Tamar
Tamar

Israel will collect an estimated $58 billion in natural gas royalties and taxes through 2046.

After several news outlets reported a decrease in Israel’s expected income from the natural gas sector, sources at the Ministry of Finance stressed to “Globes” that the reports were inaccurate.

The state’s expected revenues from the natural resource’s exploitation are estimated at 52-62% of the profits and will be financed through royalties of 12.5% from the investors’ income, graduated excess profits taxes of 20-50% and corporate, as well as corporate taxes (26.5%). The reason for the gap in the state’s share of the profits is that the Tamar investors had received benefits which reduced their tax liabilities.

Israel’s expected income from taxing the Leviathan and Tamar gas reserves will reach $58 billion through 2046, according to an updated forecast conducted by economists at the Ministry of Finance - far lower figure than the figure of $126 billion presented by former Bank of Israel Governor Stanley Fischer.

The outlook presented by Fischer assumed the development of additional reserves as well as a fixed price for gas. It should be noted that the even higher figures presented recently by Dr. Adi Brender, of the Bank of Israel’s research unit, were intended merely as a simulation and not as an accurate forecast.

Published by Globes [online], Israel business news - www.globes-online.com - on August 4, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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