Venezuela will impose tax on oil extraction Chavez

CARACAS, Venezuela
President Hugo Chavez said Sunday that Venezuela would take new steps to increase revenues from its all-important petroleum industry, including a new oil extraction tax.

"We are going to create a new oil tax called the extraction tax," Chavez said.

"The companies that are pumping oil in Venezuela are making a lot of money."

Chavez, who made the announcement during his weekly television and radio program Hello President, did not offer details of the new tax.

Venezuela also plans to raise income taxes to 50 per cent from 34 per cent for oil companies operating along the Orinoco River and boost taxes on natural gas businesses operating in this oil-rich South American country.

Chavez, a critic of capitalism, has accused foreign oil companies of exploiting his country’s vast petroleum reserves without paying sufficient taxes and has taken steps to increase revenues from the industry.

Chavez applauded Bolivian President Evo Morales’ decision to nationalize his country’s natural gas industry, a move that has rattled foreign investors and other countries in the region.

"Hopefully, all Bolivians will understand that this is vital for Bolivia’s future, just like what we are doing is vital for the future of Venezuela," Chavez said.