VZCZCXRO9846
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHMT
RUEHNG RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHCV #1669/01 3401842
ZNR UUUUU ZZH
P 051842Z DEC 08
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC PRIORITY 2242
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHNSC/NSC WASHDC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY

UNCLAS SECTION 01 OF 02 CARACAS 001669 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PREL EINV PGOV VE
SUBJECT: VENEZUELA: TAX AUTHORITY SURPASSES 2008 REVENUE 
GOAL; LOOKS FORWARD TO 2009 
 
REF: CARACAS 01463 
 
¶1. (U) Summary.  The tax authority of the Bolivarian Republic 
of Venezuela (BRV) announced December 2 it had already 
reached its tax revenue goal for budget year 2008.  Tax 
officials predict record tax revenues for budget year 2009 
and continue to find creative methods to increase compliance 
with the tax code, including the inauguration of "street 
operatives." 
 
---------------------- 
A DRUM ROLL PLEASE.... 
---------------------- 
 
¶2.  (U) On December 2, Jose David Cabello Rondon, the 
Superintendent of the National Tax and Customs Authority 
(SENIAT) announced that between January and November of 2008, 
SENIAT had collected 60.83 billion BsF (approximately 28.3 
billion USD at the official exchange rate of 2.15 BsF to 1 
USD.)  This total surpassed 2008's budgeted tax revenue by 
.03 percent and includes revenues received from income and 
corporation tax, customs tax, the value added tax and other 
taxes, such as those on alcohol and cigarettes.  The 2008 
revenue to date represents a 21 percent increase in tax 
collection over the 50.2 billion BsF (approximately 23.35 
billion USD) collected by SENIAT in January to November 2007. 
 
--------------------------------- 
SENIAT'S DISCUSSION OF 2009 GOALS 
--------------------------------- 
 
¶3.  (U) On November 24, SENIAT issued a press release that 
detailed the 2009 tax revenue goals set forth in the 2009 
budget.  (Note:  The 2009 budget is currently pending 
approval before the Venezuelan National Assembly.)  The tax 
collection target for 2009 is set at 76.8 billion BsF 
(approximately 35.72 billion USD.)  SENIAT stated that the 
2009 tax revenue target is 14 billion BsF greater than 2008 
tax revenues.  (Note:  This claim is not supported by the 
data available to SENIAT at the time of publication.  If the 
growth in 2009 tax revenue mirrors the rate of growth from 
2008, Post estimates SENIAT tax revenue will be closer to 
80.76 billion BsF (approximately 37.56 billion USD.) End 
Note.)  However, SENIAT did mention the possibility of a tax 
revenue shortfall.  In its press release, SENIAT squarely 
placed the blame for any shortfall on "the consequences of 
the financial crises generated by the United States and the 
effect on the global economy." 
 
--------------------------------------- 
TAX OPERATIVES TAKIN' IT TO THE STREETS 
--------------------------------------- 
 
¶4.  (SBU) As reported in reftel, SENIAT had already launched 
well publicized and aggressive tax enforcement actions 
against a number of high profile taxpayers this fall.  A 
VenAmCham committee member yesterday reported that SENIAT has 
recently sought to fine several firms for not paying their 
taxes on time.  When presented with evidence that the taxes 
had been paid on a timely basis, SENIAT has backed down but 
asked that firms pay 10 days in advance next time. 
 
¶5.  (U)  A new wrinkle in the increased enforcement of the 
tax code is the recent development and deployment of 
"operativos de calle" ("street operatives").  These street 
operatives urge businesses to declare their receipts for 
income tax collection purposes and to pay the appropriate 
value added tax on their sales.  According to news reports, 
the street operatives are working the main street in the 
Andean zone of the country and are visiting small businesses 
such as clothing, electronics, and jewelry stores as well as 
butchers, bakeries and beauty salons, all businesses which 
see an up-tick in holiday sales.  The new enforcement 
strategy could add to the increase in tax revenue already 
realized in 2008. 
 
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COMMENT 
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¶5.  (U)  The BRV has used its windfall oil revenue to fund 
off-budget spending, often focused on shoring up Chavez' 
political base through massive social spending.  The recent 
collapse in oil prices will force the BRV, in the new year, 
to search for revenue to avoid dipping into its array of 
rainy day funds.  We assess that SENIAT collections through 
the end of 2008 could provide the BRV with as much as 6 
 
CARACAS 00001669  002 OF 002 
 
 
billion BsF in unbudgeted funds.  SENIAT will push to 
increase tax collection in 2009 as well.  These funds could 
be used by the BRV to soften the economic blow of decreased 
oil revenue, allowing it to continue spending on the massive 
social programs. 
GENNATIEMPO