Venezuela to raise taxes on foreign oil firms

President Chavez has said that Venezuela would take further steps to increase revenues from its all-important petroleum industry.

President Hugo Chavez has said that Venezuela would take further steps to increase revenues from its all-important petroleum industry, including raising taxes on companies that extract oil in the South American nation.

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Chavez, who made the announcement during his weekly television and radio program, said the measure would require companies to pay a 50 per cent tax on royalties, up from the current 33 per cent rate, creating $1 billion in new revenue.

"The companies that are pumping oil in Venezuela are making a lot of money," Chavez said.

Chavez said Venezuela also plans to raise income taxes to 50 per cent from 34 per cent for oil companies operating along the Orinoco River and boost taxes on natural gas businesses operating in this oil-rich South American country.

Chavez, a critic of capitalism, has accused foreign oil companies of exploiting his country's vast petroleum reserves without paying sufficient taxes and has taken steps to increase revenues from the industry.

Chavez applauded Bolivian President Evo Morales' decision to nationalize his country's natural gas industry, a move that has rattled foreign investors and other countries in the region.

"Hopefully, all Bolivians will understand that this is vital for Bolivia's future, just like what we are doing is vital for the future of Venezuela," Chavez said.