Sunday, July 10, 2005

More money for more services 

An article in Ultimas Noticias noted that the Venezuelan tax authorities have through June collected 67% of the tax revenue budgeted for the entire year. So far 17.8 trillion bolivares have been collected out of an annual budget of 27 trillion. This is simply astounding. It means that they are a full two months ahead of schedule on tax collection – ie they have collected as much revenue as they would have expected through the end of August. What makes this even more impressive is that the first half of the year is typically the slowest in terms of tax collections as economic activity and tax revenues are typically greater in the second half of the year which includes the busy commercial period around Christmas. So it is not out of the question to think that revenues could beat budget by 50% or more.

This increase in revenue results from the rapid growth of the economy (17.4% last year and 7.9% in the first quarter if this year) as well as increased collection efforts and strict penalties for tax evasion which until Chavez’s rise to power had been rampant in Venezuela. An example of this strict compliance measure is the frequent temporary closure of any establishments which don’t have their financial records in order. In fact SENIAT (the Venezuelan tax service) just closed 45 establishments, primarily hotels and bars, in Los Roques which is a very expensive and exclusive tourist destination off the coast of Venezuela. Talk about putting a crimp in some sufrinas weekend getaway!! But of course no one is against sufrinas enjoying themselves, we just want them to pay their fair share of taxes to support needed government services. And under Chavez, they are. Good for them.


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