Official: Oil firms willing to pay tax increase in Venezuela

[Robbien]

CARACAS, Venezuela (AP) - Many oil firms, both foreign and domestic, working in Venezuela are willing to pay a forthcoming 16 per cent tax increase planned by the government of President Hugo Chavez, a top tax authority said. Oil companies are bracing for more taxes as the government has said they will now be required to pay 50 per cent income tax amid record oil prices instead of a preferential 34 per cent tax rate currently in place.

Jose Joaquin Cedillo, a representative of the Seniat tax agency, was quoted by the local El Universal daily on Friday as saying that oil companies working under 16 of the 32 operating agreements with the state-run oil firm Petroleos de Venezuela S.A. are willing to accept the tax hike. "Oil companies (working) under 16 agreements have said that they want to establish a path for the adjustment," Cedillo said without providing additional details.

When the contracts were signed in the 1990s, oil firms were registered as contracted help for PDVSA, making them eligible for a low industrial tax rate. Venezuela's oil minister recently said Seniat will strip them of that lower rate.

Firms with contracts to produce oil for PDVSA include ChevronTexaco, British Petroleum, Spain's Repsol, Royal Dutch Shell and China National Petroleum Corp.

http://www3.cjad.com/content/cp_article.asp?id=/global_feeds/CanadianPress/BusinessNews/b0520111A.htm

[bemildred]

1. This should be good.

The State Department response will be forthcoming.
:popcorn:

[Robbien]

2. Yes. The oil companies keep threatening to leave

but when push comes to shove, they will not let go of the black gold even when they don't get to keep all the profits.

[Roland99]

3. Because you and I will end up paying the costs.

[bemildred]

4. Anything that reduces the glut of SUVs has a certain attraction.

Painful though the adjustment might be.

[Roland99]

6. There's much truth in that sentiment.

[Robbien]

5. True.

The oil companies have just agreed to switch which chickens get plucked. The easy pickings in Venezuela is not so easy any more, but the pickings in the US is being softened for the slaughter by our representative government.

[David__77]

7. Oil-producing countries should cartelize tax policies.

They should jointly set tax policies in such a way as to extract maximum revenue from developed countries, and should use some the revenues to support non-oil exporting developing countries, in exchange for their diplomatic support.

[bemildred]

8. You should avoid small planes. nt