Venezuela hopes to push through oil income tax reform

May 12, 2004 02:00 AM

Venezuela's Seniat national tax office hopes to push an income tax reform through the National Assembly aimed at halting tax evasion in the oil industry, Seniat chief Jose Vielma said.
Vielma estimated accumulated tax evasion in the oil industry at $ 3 bn. Venezuela opened its oil industry in the early 1990s, but it wasn't clear if the $ 3 bn figure is annual or cumulative from that time.

The reform is aimed at "putting a fiscal fence around all the companies linked to the oil business, that in some way are evading the payment of taxes."
The pressure for more taxes comes as the government ramps up social spending ahead of state and local elections, which are slated for September. Apart from state elections, President Hugo Chavez faces a possible recall referendum this year.

Earlier this year, Vielma has said the office could lift income tax receipts from the oil and natural gas industry to 5 tn to 7 tn bolivars ($ 1= VEB 1917.60) in 2005, up from VEB 600 bn last year, if income tax rates are adjusted.
Venezuela's 2001 hydrocarbons law lifted royalty taxes to 30 % from 16.7 %, but cut income tax rates to 50 % from 67 %.

Source: Dow Jones
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