Venezuela fines/shuts Nokia, Siemens, Ericsson

Details: Alec Barton; Category: Trends & Forecasts; 11 October 2005; 17197 views

Venezuela's tax agency Seniat declared last Wednesday that it had imposed fines and ordered the temporary closure of various foreign companies' offices in the country due to tax irregularities. The agency ordered the 48-hour shutdown of IBM in Caracas, as well as autoparts company Bosch Rexroth, for bookkeeping irregularities relating to value added tax. Others, such as Microsoft, Honda, Nokia, Ericsson, Siemens and Colombina, will face closures ranging from 24 to 48 hours, as well as fines.

The reasons for punitive actions against the last few remain unclear, and company officials could not immediately be reached for comment. Seniat officials have been pursuing an aggressive "zero evasion" campaign that has helped the government of President Hugo Chavez reach new tax collection records. The president himself has said that all companies must pay their taxes, particularly foreign ones that pay taxes in their home countries but all too often skip what they owe in Venezuela.

Under the President's watch the Seniat is pursuing foreign oil companies with an unpaid tax bill of more than US$3 billion going back several years. The government has also said that oil companies will not be able to continue operating in Venezuela if they refuse to pay what they owe.