Venezuela cuts taxes on oil companies. Why?

Venezuela reduced its oil windfall profits tax somewhat today. I think it vindicates my analysis from two years ago, when the tax was raised, which was that the increase was just a way to get some extra money in the slush fund for last year’s election campaign. It also vindicates my recent analysis that cutting that tax was one of the few things a new government could do that wouldn’t stir up the Venezuelan public, though I was assuming in that article that Chávez would no longer be in command. OK, maybe he isn’t. What do we know, anyway?

Anyway, I’m looking forward to Eva Golinger’s take on this tax cut. She said the increase two years ago was good for the Venezuelan people. Now PDVSA has had to turn over a few billion dollars to FONDEN and has fallen even further behind on its responsibilities, and now the tax gets cut. Is this also good for the Venezuelan people?


6 thoughts on “Venezuela cuts taxes on oil companies. Why?

  1. Paramo

    Yes, interesting. I just saw this on the news. I wait to have the Gaceta Official to read the new rules. If incentives are good for oil companies also is important the stability of the tax regime, and this government has modified i think four times the WPT in the last 4 years.

  2. Stephanie Lee

    Hi Setty!

    I’m wondering- do you do consultancy work? and if so- how much do you generally charge?

    I’ve been offered some work by a few people and it’s interesting (at least I think you’d also find it interesting…) and I basically think I’ll only have a little time to do it…and hence will need to go back to them to turn most of it down- or find them someone else. and so thought of you!

    They can’t pay very much- but if you’re interested I could explain the work…I’d have to run it past them of course- anyway! just a thought at this stage.

    Your blogs continue to be super interesting. I wish I had the time to read them in depth

    cheers Steph

  3. Kepler

    Coulson is right. That creature won’t have a clue and she won’t care because her target audience doesn’t have a clue and we won’t know how to let them care.

    Ach, Setty, the Anointed one just said Venezuela shall become a superpower nonetheless:

    I will later post some stuff the Ruski are writing about Igor the KGB Creep’s visit to the Land of Grace. It’s all about oil.

  4. Jeffry house

    It should be obvious that Gollinger will simply not mention the change. We saw that with jury trials, where a large propaganda effort was mounted when Venezuela brought in jury trials as a tool against corruption. Then, when Chavez got rid of jury trials by decree, there wasn’t a peep.

  5. Lobo

    They are not paying any dividends to ‘oil companies’ anyway. This only helps PdVSA with a little extra cash flow, but its not much in the scheme of things.

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