Corporate Taxpayers Help Keep Tax Revenues Flowing For Venezuelan Government

by Mike Godfrey, Tax-News.com, Washington

03 February 2006

Corporate and large individual taxpayers have contributed to a substantial increase in tax revenues for the Venezuelan government, which is continuing to turn the screws on foreign business, particularly in the oil sector.

According to a report by Dow Jones Newswires, the Venezuelan tax agency, Seniat, has collected more than 1.1 trillion bolivars ($530 million) in January, almost 26% ahead of its own target for the month.

A Seniat statement revealed that the bulk of the collections were extracted from corporate taxpayers and wealthy individuals in both value-added taxes and income taxes.

Seniat expects to collect as much as VEB50 trillion in tax this year.

Last month, Jose Vielma Mora, the head of Seniat, revealed that foreign oil companies had so far paid $125.6 million in back taxes as a result of the country's widespread audit of overseas firms operating in the nation's oil industry.

The agency has also said that it was considering widening its audit of the oil companies to cover years back as far as 1993.

However, the tax agency has not restricted its activities to the oil sector, and it has been keen to enforce tax compliance across the board.

In a bid to crack down on tax evasion, it was reported this week that Seniat has demanded payroll and other financial data from about 100 companies to ensure they are in full compliance with the nation's tax laws.

Among the companies approached by the tax agency include the bottling firm Coca-Cola FEMSA, cellular phone company Movilnet, and major banking and construction firms, according to a report by the Associated Press.

In October 2005, Seniat ordered the temporary closure of a number of foreign companies, including IBM and Bosch Rextroth, due to bookkeeping irregularities relating to income tax and value added tax. Nokia, Ericsson and Honda have also come under the agency's scrutiny.

Recommended