Saturday, April 03, 2004

Venezuelan tax authorities getting more aggressive 

Yesterday I mentioned how tax collections in Venezuela were at an all time high. Today a clear example of how the tax authorities, SENIAT, have managed to collect so much tax occurred.

As part of a crack down on tax evasion by retail stores SENIAT ordered the shutting down for three days of two upscale clothing chains, Zara and Bershka. Additionally, they will have to pay a hefty fine of 1.5 million bolivares for each store branch.

The reason for these actions is that the stores were not keeping proper records to allow auditors to verify if they were paying the proper amount of Value Added Tax.

The Venezuelan business class is used to never paying taxes or grossly under paying. During the 40 years prior to Chavez coming to power tax evasion was rampant. The Chavez administration has made a concerted and sustained effort to make sure all taxes are paid. This is another reason for the extreme hostility of the Venezuelan business class towards President Chavez.


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