Venezuela Plans New ‘Sudden Gains’ Oil Tax Soon

Venezuela plans a new tax on foreign oil companies of 20%-25% on what the government deems to be “sudden gains” from strong fluctuations in world oil prices, a lawmaker said Wednesday.

“The tax will be anywhere between 20% and 25% of what we deem sudden gains,” lawmaker Iroshima Bravo told Dow Jones Newswires. “We’re studying various examples of the tax, and this should be ready soon.”

Bravo heads a team of lawmakers in charge of studying the application of similar tax rates in other countries. Once a proposal is ready, President Hugo Chavez could use his special presidential powers to pass a hydrocarbons industry law reform that includes the new tax, Bravo said.

Bravo didn’t give specifics on what the government defines as sudden gains, but said the government is still studying a specific formula for calculating the gains that will be taxed in the future. The proposed new tax would come on top of existing taxes the foreign companies already pay.

RigZone