Venezuela to hike taxes on foreign oil cos

He said details of the new tax would be revealed in coming days.

‘‘We are going to create a new oil tax, called the tax on extraction,’’ Chavez said. ‘‘The companies that are pumping oil in Venezuela are making a lot of money.’’

Venezuelan Oil Minister Rafael Ramirez said the government was considering a 33.3 per cent extraction tax.

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.

Chavez, a critic of capitalism, has accused foreign oil firms 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.

Last month, Venezuela voided oil-pumping contracts with private companies at 32 fields and replaced them with a mixed-company model that gave Venezuela’s state-owned Petroleos de Venezuela SA a minimum 60 per cent stake, sharply raised royalties and taxes and reduced potential drilling acreage by almost two-thirds.

Ramirez said the mixed companies would be exempt from the extraction tax because they already pay 33.3 per cent in royalties. —CHRISTOPHER TOOTHAKER