MercoPress. South Atlantic News Agency

Chavez warns oil companies: “pay your taxes or leave”

Oil corporations operating in Venezuela must pay to the government tax arrears, “retroactive plus interest”, or “abandon the country” warned Monday president Hugo Chavez during his Sunday national radio and television show, “Aló president”.

"I've ordered PDVSA (Venezuelan government oil company) and SENIAT (Venezuela' tax office) to calculate retroactively all they owe us, so we can collect all they owe us retroactively plus generated interests", said Mr. Chavez.

Last November the Chavez administration increased extraction tax or royalty from 1 to 16,6%, and beginning this year profits tax, 50%, which must be paid by all international oil corporations in Venezuela, the world's fifth crude exporter.

"Not all but quite a number of these corporations" in Venezuela have been avoiding the extraction tax in Venezuela revealed Mr. Chavez although he mentioned no names. "They must abide by Venezuelan legislation, they must pay what they owe us and have been avoiding, and if they don't pay they have to leave the country", challenged Mr. Chavez. Some of the corporations operating in Venezuela include French Total; Spanish Repsol-YPF; Brazilian Petrobras; and US companies Chevron, Texaco, Exxon Mobil and Conoco-Phillip.

Mr. Chavez underlined that making effective these alleged oil corporations tax debts is part of the "strategy to increase national income, an issue on which I have been insisting on for months".

Venezuela's National Assembly is scheduled to begin Tuesday an investigation into alleged "contract violations" in the exploitation of crude oil.

Mr. Chavez has also insisted that the assembly must approve a bill entitling the Executive to make use of the "excess" international reserves. "International reserves are too high at 28 billion US dollars", indicated Mr. Chavez arguing that "for the size of the economy, 20 billion are more than enough". "My proposal is that we invest five billion US dollars of that excess for importing farming equipment from Brazil, Argentina, India, Japan, Germany, Iran to help us process beef, pork, fisheries, dairy products,?"

However Mr. Chávez admitted he was "alone" on this crusade and requested Assembly members and governors to support him in his request to the Central Bank.

"Come on governors, assembly members, let us step up and have the bill approved so with the money we can import farm machinery and food processing equipment, and give them to the rural communities", insisted the Venezuelan president.