Venezuela approves windfall oil tax

Venezuela moved Tuesday to take a greater cut of windfall oil profits, approving a 50 percent tax on foreign oil companies when crude tops $70 a barrel.

The tax rate would rise to 60 percent when the average monthly price for benchmark Brent crude exceeds $100, according to the bill approved by Venezuela’s National Assembly. The legislation will take effect as soon as it is published in the official gazette.


Revenues from the tax could reach $9 billion annually, Oil Minister Rafael Ramirez said after meeting with lawmakers.

“That’s why, for the executive branch, it is urgent to create this law,” Ramirez said.

The new legislation will let President Hugo Chavez further extend state control over foreign oil companies operating in Venezuela – home to the largest petroleum deposits in the Western Hemisphere – as he steers the nation toward what he calls “21st-century socialism.”

AP