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Venezuela raises taxes on wealthy, big business

Venezuela raises taxes on wealthy, big business

CARACAS: Venezuelan President Nicolas Maduro announced on Thursday a package of changes to tax law and currency regulation in an effort to boost public revenue amid a deep economic crisis.
The leftist head of state acted hours before the expiration of the special powers Congress granted him to legislate by decree in certain areas.
The income tax reform targets holders of large capital, not workers or small businesses, Maduro said, adding that the change would affect “about 3,000 taxpayers.”
The top tax rate “for these sectors of great capital” will increase from 34 percent to 40 percent to ensure the government of sufficient revenue to “maintain investment,” he said.
Another aspect of the overhaul is an increase in the tax on major corporate financial transactions to 0.75 percent, the president said.
He also announced a reform in the exchange rate regime barring firms from using any measure other than the official exchange rate to determine prices of goods and services.
Maduro described currency speculation as “one of the key mechanisms in the economic war” he contends is being waged against his government by parts of the business community.
The president likewise promulgated decrees giving the state control over gold, “strategic” minerals and the oil industry.
Venezuela’s economy has contracted around 7 percent this year and inflation is running at nearly 100 percent, according to Maduro, whose party lost control of congress in the Dec. 6 legislative elections. The IMF says that Venezuela’s GDP will have contracted 10% in 2015 and that inflation is closer to 200%.