631.003/512

The Minister in Venezuela ( Nicholson ) to the Secretary of State

No. 426

Sir: I have the honor to refer to my despatches No. 323 of June 18, 1936 and No. 337 of June 26, 1936 regarding the proposed increase in the internal revenue tax on cigarettes imported into Venezuela from Bs. 10, the present rate, to Bs. 25 per gross kilogram.

During its second reading of the bill containing the increase above mentioned the Chamber of Deputies on August 3 voted to place the tax at Bs. 15, and the local representatives of American cigarette manufacturers expressed themselves as satisfied with this compromise figure. However, during the third reading of the bill on August 21, the tax was raised to Bs. 20, which is much less satisfactory from the American point of view but which is nevertheless more acceptable than the originally proposed rate of Bs. 25 per kilogram.

The bill has already passed its three readings in the Senate, but in view of the changes made by the Chamber of Deputies it now goes back to the former body for approval. Unless unforeseen objection is made, the internal revenue tax on imported cigarettes will now stand at Bs. 20 per kilogram.

Respectfully yours,

Meredith Nicholson