VENEZUELA: Oil giants' taxes hiked up again

Stuart Munckton

Associated Press reported on March 14 that the left-wing Venezuelan government has hiked up the rate of income tax being paid by oil multinationals that invest in Venezuela, from 34% to 50%. Multinationals have already had to renegotiate their contracts to invest in Venezuela to give the state-run oil company 51% minimum control in all their operations. Royalties paid by the multinationals had already been raised from as low as 1% to as high as 30%.

French oil giant Total SA agreed to pay part of its overdue tax bill of US$107 million after it was threatened with fines, temporary office closures and property seizures if it didn't settle its bill within 24 hours.

Marketwatch.com reported on March 15 that "Venezuela is tightening the fiscal noose around oil majors that pump heavy crude in Venezuela's Orinoco river basin as it prepares a retroactive royalty bill on associated natural gas production", for royalties it claims the oil companies have failed to pay. Venezuelanalysis.com reported on March 15 that the government was also considering increasing taxes for natural gas to 50%.

From Green Left Weekly, March 22, 2006.

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From GLW issue 661