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Wednesday, December 06, 2006

Chavez Placing Luxury Tax on Scotch

First it was a ban on street sales from beer trucks, now Venezuelan President Hugo Chavez is taking aim at Scotch by announcing plans for a 15 percent luxury tax on whisky.

The cost of imported spirits have already jumped 50 percent since this summer, when the Chavez government imposed foreign currency restrictions and linked all transactions involving imports to the official exchange rate for bolivares.

Venezuela loves its whisky. It is the seventh largest market for Scotch in the world and sales have increased as oil wealth flows into the country. The Scotch Whisky Association pegs the value of Scotch sales to the South American nation at $145.2 million. It has aksed the European Commission to look into the situation as a possible international trade rule violation.

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