President Hugo Chavez announces sweeping changes ... 1.5% tax on financial transactions to be eliminated

Caracas Daily Journal (Jeremy Morgan): President Hugo Chavez announced sweeping changes on the economic front. After a lengthy meeting at which he addressed as many as 500 business executives, he said the 1.5% tax on financial transactions (ITF) would be eliminated.

The other big ticket item for his audience was a further easing of the rules on hard currency for small importers.

Companies seeking permits for access to sums of $50,000 or less will no longer have to submit documentation to back their case. This, he said, would cut work at the Foreign Exchange Administration Commission (Cadivi) by 52%. Time spent on processing applications would be cut to 72 hours.

The package included a swathe of state cash, starting with $500 million from the National Development Fund, Fonden. There was a slew of subsidies for agriculture to boost food production.

Chavez' tone was reconciliatory, after years in which he and business community have viewed each other with hostility and suspicion. He told them not to worry about new business taxes this year; there wouldn't be any. He called on all sides to set aside hatreds to join a "true national alliance" led by Vice President Ramon Carrizalez. "We're going to talk, we're going to form an alliance" on behalf of people hit by inflation, social inequality and poverty."