Ashkelon Planning Committee Fined After Attempting to Collect Excessive Tax
Translated & summarized from Globes by baba
The Ashkelon Local Planning and Building Committee was fined 50,000 shekels after its attempt to collect a 117.3 million shekel betterment levy from the Israel Electric Corporation was rejected. The Southern District Appeals Committee ruled the levy was baseless, citing insufficient planning and appraisal grounds for the tax related to the Rotenberg power station's switch to gas. The committee's decision emphasized that the IEC did not profit from the change, as cost savings could be passed to consumers.
The story in 5 lines · by baba
- Ashkelon Planning Committee fined 50,000 shekels after attempting to collect 117.3 million shekel tax.
- Appeals committee ruled the betterment levy on Israel Electric Corporation's power station was baseless.
- The decision was based on insufficient planning and appraisal grounds for the tax.
- The power station's switch from coal to gas did not enrich the Israel Electric Corporation, the committee found.
- The ruling came after IEC appealed the initial assessment by the Ashkelon committee.
The Ashkelon Local Planning and Building Committee's attempt to collect a betterment levy of 117.3 million shekels from the Israel Electric Corporation (IEC) has been overturned, resulting in a mere 50,000 shekel penalty for the committee. The levy was sought due to the Rotenberg power station's transition from coal to gas energy.
The Southern District Appeals Committee rejected the levy, deeming it baseless. The committee found that two plans, National Outline Plan TAMA 37 and a specific work plan approved in 2022, did not provide a legal or appraisal basis for the betterment levy. TAMA 37 was considered a general framework for gas infrastructure, not a plan that altered the planning reality, while the work plan was deemed an alternative procedure under the Natural Gas Sector Law, not a local or detailed planning scheme.
Furthermore, the appeals committee examined the appraisal aspect, concluding that the IEC did not enrich itself from the fuel switch. They reasoned that electricity costs are regulated by the Electricity Authority, and any savings from the fuel change might be passed on to consumers as lower tariffs, rather than increasing the IEC's profits.
IEC had appealed the committee's initial assessment, which claimed the power station's value increased by 10% due to the transition, justifying the substantial betterment levy. The appeals committee, led by attorney Amit Ofek, found the committee's assessment to be without normative or appraisal basis, placing IEC in an unreasonable defensive position.
Consequently, the appeals committee imposed a significant expense of 50,000 shekels on the Ashkelon Local Planning and Building Committee, to be paid to IEC within 30 days. This decision highlights the importance of proper legal and appraisal foundations when imposing betterment levies.