April 6 (Reuters) – The Venezuelan government said on Tuesday that it will exempt only small companies created this year from paying taxes, as the COVID-19 pandemic, long economic recession, and hyperinflation continue to plague the South American nation.
Unlike other countries in the region, President Nicolas Maduro has not given tax benefits or other incentives to specific industries and businesses despite ongoing quarantine measures, which have hit business activity.
“The new micro-businesses created in 2021 will not pay a fee,” Maduro said in an address broadcast on state television.
“They will not pay income tax for income generated until December 31, 2021,” he said, adding that this would facilitate the creation of companies and micro-businesses.
Desperate for income in the face of U.S. sanctions on its oil sector, analysts say Venezuela has maintained taxes on large and medium-sized industries even as business associations have called for tax relief, citing low economic activity.
These industries have also faced an increase in local taxes in the last year, which mayors set based on the fluctuation of the U.S. dollar.
Maduro also announced the government would extend measures introduced during the pandemic, aimed at securing jobs and avoiding layoffs, until the end of the year.
The government relaxed controls on the economy at the end of 2018, which has allowed for more transactions in foreign currency, but economists say these actions have been insufficient to reverse the deterioration of the economy. (Reporting by Mayela Armas; Writing by Sarah Kinosian; Editing by Ana Nicolaci da Costa)
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