Bolivia: Change to Oil Law

See also Blog from Bolivia after article.

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A tax increase on foreign oil companies operating in Bolivia was signed into law yesterday by President Eduardo Rodríguez, raising the total charges from 38 percent to 50 percent effective immediately.

Presidential Chief of Staff Iván Avilés estimated the new law could double the country’s annual income from its oil resources, which now stands at US$118 million. Sen. Hugo Carvajal, a supporter of the legislation, has said the new taxes could bring as much as an additional US$400 million (307 million euros) each year to South America’s poorest country.

The legislation was passed by Congress in May amid massive street protests that triggered the resignation of President Carlos Mesa, who was succeeded by Rodriguez. The law maintains an 18 percent royalty paid by the companies but increases the non-deductible tax levied on them from 10 to 32 percent, for an effective 50 percent total tax.

One of three decrees signed by Rodriguez along with the legislation orders the armed forces and police to provide security to avoid disruptions of oil production such as those caused in recent months by protesters demanding the outright nationalization of the oil industry.


http://www.falkland-malvinas.com/Detalle.asp?NUM=5930

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Blog from Bolivia

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...This morning I met with the leadership of the second largest labor federation in the country. I could just as easily have been back home in Bolivia. The IMF and World Bank are at work here trying to convince the country to privatize its water and its public heath system. People are nervous, especially labor groups. The other privatizations here haven’t turned out so good for workers. One by one the nation's economy is not only being put into private hands but foreign hands.

As in Bolivia, the tool in the hands that come from Washington is debt. Countries like these have borrowed a bundle from abroad and now the payback includes not just cash but changing the economic rules of the game to the IMF's and Bank's liking.

The people of the Balkans have suffered horribly in the past fifteen years. A third of this nation was occupied for five years. Hundreds of thousands of Croatians fled the Serbian takeover, left their communities and became refugees. And this pales against the horror of "ethnic cleansing" operations that took place nearby in Bosnia and Kosovo.

What do Croatians want now? In addition to peace they want democracy – the right to self-determine their own futures, both political and economic. Yet here, as in Bolivia, democracy is really a power sharing relationship with global institutions over which the nation has little influence.

http://www.democracyctr.org/blog/

(Just saw that movie the other day)

:)



I wonder how long until those increased taxes hit the pumps?

It doesn't take as long to ship oil from South America as it does from the Middle East. Just have to wait for refineries to get around to refining it.

I could see this story getting bigger-than-usual newsplay, prompted by the oil companies, as a ploy to increase prices.

:thumbsup: