Chavez says no sales tax hike in Venezuela

Venezuela's government will not increase its sales tax as had been expected thanks to high global oil prices, President Hugo Chavez said.

Chavez says no sales tax hike in Venezuela

Venezuela's government will not increase its sales tax as had been expected thanks to high global oil prices, President Hugo Chavez said on Tuesday.

The socialist leader had said last month that he would use decree powers given to him by parliament to raise the sales tax rate from its current 12 percent.

The president had said the measure was needed so the South American nation could raise funds to help it recover from floods that drove 140,000 people from their homes.

"Not by one point, or by two points or by anything ... there is no increase in sight," he said in a televised speech, adding that strong oil prices made the move unnecessary.

Crude oil prices hit their highest level in more than two years in intraday trading on Tuesday, topping $92 a barrel.

Chavez also ruled out introducing a tax on bank transactions and said he would not raise taxes on gasoline or electricity.

"Neither will we have a bank debit tax at this time or on the horizon this year. It will not happen, like we have decided not to increase gasoline and electricity. No!" he said.

"When you have to do something like that, we reason, we explain, and I am sure the people will understand," he said.

Venezuela's economy shrank an estimated 1.9 percent in 201O, the central bank said last week, marking a second consecutive year of recession.

The economy contracted 3.3 percent in 2009, but the Finance Ministry says the OPEC member is now pulling out of recession and is forecast to grow by 2 percent in 2011.


Reuters

Last Mod: 05 Ocak 2011, 10:30
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