Mérida, July 11, 2007 (venezuelanalysis.com)— Venezuela’s tax collection agency SENIAT announced yesterday that the government reached 63.7% of its tax collection goal for 2007 in the first half of the year. SENIAT collected more than Bs. 37 trillion (US $17.2 billion) in that period, compared to only Bs. 25.6 trillion (US $11.9 billion) in the same period of 2006. As a part of a policy that seeks to reduce state dependence on oil revenues, the Chavez government has increased tax enforcement in the country, while at the same time reducing the tax burden on the poor.
According to SENIAT Superintendent Jose Gregorio Vielma Mora, speaking at the Foreign Minister’s office yesterday, the total collection goal for 2007 is Bs. 59.2 trillion (US $27.5 billion). This amount represents a 43.5 percent increase in tax collection from the year before.
SENIAT released the numbers for the month of June as well, which showed a total collection of Bs. 6.5 trillion (US $3 billion), 33.5% more than the established goal of Bs. 4.9 trillion (US $2.3 billion). Vielma Mora also said that for the month of July the agency has already collected Bs. 967 billion (US $450 million) of the total goal of Bs. 4.3 trillion (US$2 billion).
The government has been trying to increase tax income through a tax collection program called "Zero Evasion and Contraband," and SENIAT attributed the increased tax revenues to the efforts of this program. But Vielma Mora stated that the agency is still struggling to enforce the increased tax rates and prevent some sectors from evading payment.
"The neoliberals don’t want the taxes to go up," he said, explaining that tax evasion "is a common practice and maneuver of the world capitalists and neoliberals."
According to official SENIAT statistics, the higher numbers this year are also due the increased earnings from the income tax, which went up 70.5 percent from the first semester last year, totaling Bs. 18.1 trillion (US $8.4 billion) compared to only Bs. 10.6 trillion (US $4.9 billion) for the same period last year.
Venezuela’s sales tax (IVA) earned a total of Bs. 13.6 trillion (US $6.3 billion) representing an increase of 23.3%, and the customs taxes reached Bs. 4.2 trillion (US $1.9 billion).
Venezuelan President Hugo Chavez has declared that the value added tax (VAT or sales tax) will be eliminated by 2009 and since February of this year the tax has been reduced from 14% to 9%. Chavez has said that the tax is a regressive tax and that eliminating the tax will be beneficial to the poor sectors of the population. He also said that lowering this tax will help to reduce the inflationary pressures in the country that have caused high levels of inflation in recent years.
The Venezuelan government plans to make up for the loss of revenues from the elimination of the VAT by increasing enforcement of tax collection and charging increased taxes on capital, as well as taxes on gambling, the reform of the income tax, and a capital tax.
"We defend the lowering of the VAT because it’s a relief on the goods and services that go to the market and that families buy," said Finance Minister Rodrigo Cabezas. "Besides, a tax like this, that directly affects the salary of the workers must be moderated and should disappear. That is the strategy of the Bolivarian Revolution," he said.