On April 21, Venezuelan President Hugo Chávez announced drastic changes to windfall oil tax rates, hiking the tax from 60 percent to 95 percent when oil prices surpass $100 per barrel. The new legislation also raises the taxes to 80 percent when oil prices are between $70-90 per barrel and 90 percent when prices are between $90-100 per barrel. The government has since sought to reassure investors, saying that companies will only pay the higher rates after they recoup their original investment. How are the new taxes likely to affect investment in the country's oil sector in the short- and medium-term? How will the taxes affect the development of Venezuela's Orinoco belt? Are Chávez's social spending projects, funded with oil revenues, achieving lasting results? Experts discuss what they think about this topic.
Copyright © 2011, Inter-American Dialogue, used with permission from the publishers
Inter-American Dialogue's Latin American Energy Advisor. "How Will New Tariffs Affect Venezuela's Oil Industry?." (2011). http://digitalrepository.unm.edu/la_energy_dialog/116