The DailyJournal 11.

89

Consecomercio calls for tax exemption

for yearly income less than_Bs.240,000
By Aaron W. Finkel percent be charged for in- would go to those earning of Krygier, Montilla &
Daily JournalStaff come tax. Twenty-five per- between Bs.120,001 and Associados.
cent is justified now that .Bs.300,000 per year while Speaking to the more than
The National Council of there will be a complemen- those earning more than 600 businessmen gathered at
Trade and Services Tuesday tary tax introduced in the Bs.1.5 million per year would Tuesday's forum, Montilla
called on the government to form of a value added tax, be subject to the maximum of said "if the upcoming reform
double the minimum yearly Nava said. :35 percent. of the Income Tax Law does
income needed to be exempt "I think that its healthy to Nava called the decision not not include an adjustment for
from the payment of income reach an accord exonerating to charge a value added tax inflation 1t will be an in-
taxes to Bs.240,000 per year. those Venezuelans that earn for those items in the basket complete reform. Given the
The appeal was made by Bs.240,000 or less annually of basic goods "very just." fact that accumulated infla-
Consecomercio President from paying income tax," However, he added that what tion over the past two years
Edgard Romero NitL at
Nava Nava said.a is "not just" is that taxes are . m Venezuela is over 100 per-
forumon the reformof of the Nava is also proposing that charged to those businesses cent, immediate action must
Income Tax Law the pro• those that earn more than that sell those products. de taken, Montilla said.
posed value added tax (VAT) B s . 2 4 0 , 0 0 0 a n n u a 11y Because of this incongruity Also speaking at Tuesday's
sponsored by Consecomercio (Bs.20,000 a month) be dis- Nava said Consecomercio is forum was Jose Rafael
and the Caracas Chamber of counted the full 100 percent asking that all those busi- Bermudez, a specialist in tax
Commerce. of the interest included in nesses that have to sell pro- law with the law firm of
Nava said the solicitation is their mortgage payments. ducts within the basket of Torres, Plas & Araujo.
made taking into account that That would stop the continual basic goods also be ex· Bermudez said the proposed
individuals are already suffer- harm being done to the mid- onerated from paying these value added tax has "un-
ing the burden of-increased dle class and would be re- taxes. deniable technical efficience"
payments under the new cognized as a reduction in in- A value added tax is a fixed in that it is the most impor-
social security, housing and come tax. percentage included in the tant source of taxes in the
unemployment insurance As it stands, a new bill in- sales price which the retailer European Economic Com-
laws. troduced by the Finance and/or wholesaler must turn munity and is used by more
Consecomercio is also ask- Ministry would set individual over to the government. than 40 countries.
ing that a maximum of 25 income tax rates at between 8 Nava said Consecomercio Those countries that use
percent_ and 35 percent. For will present its observations the tax "understood that in-
compames th e tax would be on the income tax and value come tax could not be the
45 percent for 1990 and drop added laws to Finance
to 32 percent by 1992. The Minister Eglee Iturbe de principal source of their taxa-
11 uld l i 11 tion in that income tax only
so. immate
deductions, which a Blanco on Friday.
currently taxes those that generate a
include social security, Any reforms in the pro- lot of wealth," Bermudez
utilities, insurance, donations posed income tax law must said
and dependents. Income up also include an adjustment The vAT taxes the con-
to Bs.120,000 per year would for inflation, according to sumption (with the exclusion
be exempt from taxes. The Armando Montilla, a member of exports) which permits re-
lowest tax rate of 8 percent of the public accounting firm sources to be channleed into
savings and productive in-
vestments, Bermudez said.
To insure a VAT in
Venezuela will not be turned
into income used to finance
public expenditures and the
unwanted growth of an inef-
ficient state, all other taxes
should be rationalized,
Bermudez said. "They should
be simplified, . their rates
should be reduced con-
siderably and corrective
measures should be in-
troduced to amend the
serious distortions that pro-
duce inflation," he said.