With the anticipation of the bill becoming law in a matter of hours, Venezuela Oil Minister Rafael Ramirez said the South American country's new oil tax could potentially generate more than $9 billion annually.
News reports following the announcement stated that Venezuelan President Hugo Chavez would like the funds to be spent on social services in the country during this election year.
The tax on excess revenue oil companies acquire is based on the recent record-setting crude prices that have prevailed over the last few months.
The Venezuelan government would make about 92 cents for every extra dollar when the price of crude is above $70 a barrel, according to Ramirez. The government would receive 97 cents per extra dollar when prices rise above $100 a barrel.
"Through the concept of this tax, there's going to be income around $9 billion," said Ramirez. "That's $770 million a month and an average of $150 to $200 million a week. That's why, for the executive, it is urgent to create this law."
Comments made by Ramirez in early April revealed that the tax would not be enforced retroactively.
Coincidentally, the announcement came one day after the six-year anniversary of Chavez's defeat of a U.S.-backed coup attempt on the presidency.
Though other country's have enacted similar taxes, Reuters' comments from analysts suggest that such a hefty tax could potentially discourage some future investments in the country.
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