June 01, 2005 | By Keith Martin in Washington, DC
VENEZUELA increased taxes on oil projects and is forcing some 22 companies to renegotiate their operating agreements with the government.
The moves are aimed at seizing a greater share of revenues from high oil prices.
In April, President Hugo Chavez increased the corporate tax rate on oil projects from 34% to 50%. In late May, the head of the national tax agency, SENIAT, told a parliamentary investigating committee that 90% of the 22 oil companies with operating agreements in the country have been reporting no income. A majority had agreed to pay back taxes on SENIAT’s terms by the end of May, according to the tax agency.
The government has given the oil companies six months to agree to turn their operations into joint ventures with the government. It would take a 51% stake in each venture.