Venezuela’s homegrown Oil-For-Food: the squeeze
An AP Spanish story in today’s El Herald states Chávez advierte que cobraría impuestos retroactivos a petroleras Chávez warns he’ll retroactively tax oil companies.
– El presidente Hugo Chávez advirtió el miércoles que Venezuela podría cobrar impuestos retroactivamente a empresas petroleras privadas que han declarado pérdidas durante años y no han pagado impuestos por ese motivo.
“Hay empresas internacionales que nunca pagaron impuesto sobre la renta”, dijo Chávez durante un foro con sus seguidores en Caracas.
. . .
“Que paguen el impuesto sobre la renta. Si no quieren pagar que se vayan a otro lado”, dijo Chávez.
President Hugo Chávez on Wednesday warned that Venezuela could charge retroactive taxes on private oil companies which have declared a loss for several years and have been unable to pay taxes.
“There are international companies that never paid income taxes”, Chávez said during a meeting with his supporters in Caracas.
. . .
“They must pay their imcome taxes. If they don’t want to pay, they must go elsewhere”.
Chávez is clearly preparing the ground for nationalizing whatever remains of the private sector in the oil industry. Considering the $300 million he’s paid out in illegal commissions, “there’s money in thar hills”. The article states that during the 1990s Petróleos de Venezuela signed 33 contracts with ChevronTexaco, British Petroleum, Total, Petrobras, Repsol YPF, Royal Dutch Shell and China National Petroleum Corp. Under these agreements the private companies operate low-yielding fields for a commission. Many are operating at a loss.
The total private production is 1,100,000 barrels a day, costing PDVSA $18 instead of $4 each. The Venezuelan government the total daily production is 3 million barrels, while some analysts believe it’s as low as 2.6 million. Chávez’s nationalizing these fields is a big deal for the USA.
Property rights in Venezuela are becoming a thing of the past. Taking over the private oil companies would only be one more step in steering the country towards “the same sea of happiness” as Cuba.