The Chargé in Venezuela (Dawson) to the Secretary of State
[Received October 10.]
Sir: I have the honor to refer to my despatches Nos. 929175 and 9295 of September 26 and 27, 1946, respectively, concerning remarks made by Minister of Fomento Juan Pablo Pérez Alfonso in New York on September 25, 1946, to the effect that an excess profits tax would probably be levied in Venezuela, and the local reaction thereto.
El Universal and La Esfera,
the two conservative Caracas dailies, continued editorially to criticize
Dr. Pérez Alfonso’s statement and the Government policy which seemed to
be reflected therein, along the lines taken in the enclosure to my
despatch No. 9295. This got under the skin of Minister of Finance Carlos
D’Ascoli and his Cabinet colleagues sufficiently so that an 1800-word
press release clarifying the Government’s position was given out
yesterday and published in this morning’s press. The gist of the
apologia is contained in the last three paragraphs of the communiqué,
which read as follows, in translation:
Fallacies obvious in the Government’s argument are: (1) that no plans have yet been announced to do away with any of the many onerous and unwieldy indirect taxes which all who have studied its tax structure objectively agree should be eliminated (in fact, in eleven months in power, the present Venezuelan regime has advanced nothing which had any resemblance to a tax reform plan other than to grab some $40,000,000 extra revenue by the decreeing of the income surtax imposed by Decree No. 112 a few hours before 1945 ended); (2) that, although it is true that Venezuela’s income tax is relatively low, total taxation is already higher per capita than in any other Latin American country, and (3) that no thought has apparently been given to the possibility of floating loans, justified by Venezuela’s excellent financial standing, to pay for extraordinary expenditures, the cost of which could thus be spread out over several years, instead of burdening the taxpayer immediately with the expense of long-range capital disbursements.
- Not printed.↩