CARACAS, Venezuela (AP) – Tens of thousands of Venezuelans marched on the federal tax agency yesterday and many ripped up their tax forms, vowing to further deprive President Hugo Chavez of revenue as part of their strike that has already dried up oil income.

Paul Wong
Venezulans opposing President Hugo Chavez ripped tax payment forms yesterday during a march to the federal tax agency in Caracas, Venezula. The march is the newest development in the month-old strike.

Chavez warned that tax evasion carries up to seven years in prison.

“It’s a crime not to pay taxes,” he said in a speech he ordered to be broadcast on all television and radio stations, interrupting coverage of the march. “We will not tolerate it.”

“We’ll take all actions necessary to make sure every last cent is paid because it belongs to the people.”

Protesters cheered and blew whistles as they tore up blank tax forms at the doors of the tax agency. They called for individuals and businesses to stop paying income and value-added taxes.

National Guard troops and police patrolled the headquarters of the agency but there was no unrest. The march was the first opposition protest in the capital since clashes between Chavez foes and followers and security forces left two people dead and 78 injured last week.

“This government uses our money to repress the people. We’re not going to give one more cent to Hugo Chavez,” said Luis Carlos Bustillos, 59, a veterinarian. “This will cause chaos for a few months but it’s better than chaos for a lifetime.”

Venezuela’s largest labor confederation, the biggest business chamber and opposition political parties began the strike Dec. 2 to pressure Chavez into resigning or accepting an early vote on his rule. The president has refused to do either.

The strike has crippled Venezuela’s oil industry, which provides half of government income and 80 percent of export revenue. The country is the world’s fifth-largest oil exporter, and the strike has helped send international oil prices above $30 per barrel.

Most public schools opened after the holidays, but most private schools stayed closed, said Education Minister Aristobulo Isturiz. The strike has been largely ignored by small business owners, but shopping centers and private factories were shuttered. Banks were only opening three hours a day.

The government may have to cut this year’s $25 billion budget by up to 10 percent, Finance Minister Tobias Nobrega said yesterday. Taxes were supposed to pay for a third of the budget. Oil exports were supposed to pay for half.

Eliminating tax evasion – traditionally at 50 percent – is a tenet of Chavez’s government. Last year, his government collected $6 billion in tax revenues – 91 percent of its original goal.

Adversaries blame Chavez’s policies for a deep recession, 17 percent unemployment, an increasingly feeble currency and inflation surpassing 30 percent. Chavez, who survived an April military uprising, says his foes are trying to provoke another coup.

Opponents say they will hold a Feb. 2 referendum to ask Venezuelans if Chavez should quit even if the president ignores it, as he says he will. The opposition delivered 2 million signatures in November to demand the referendum.

Chavez refused requests by the National Elections Council for funds for the vote. But he invites opponents to challenge him in a possible recall referendum in August, midway through his six-year term.

In Washington, a senior State Department official told reporters that negotiations sponsored by the Organization of American States were stalled over whether to hold early presidential elections.

The official said the OAS has reached agreement on several points dealing with confidence building measures but not on elections.

Government efforts to restore oil production and domestic gasoline supplies suffered a setback yesterday when a vacuum unit of a key refinery was damaged, refinery chief Pedro Jimenez told broadcasters. Industry sources said the accident would delay efforts to bring the 130,000 barrels a day refinery back online.

Still, lines at service stations were considerably shorter in Caracas and there were more vehicles on the roads as the government imported gasoline from Brazil and awaited shipments from Trinidad and Tobago, the United States and Russia.

Local environmentalist Lenin Herrera denounced that oil slicks were accumulating on Lake Maracaibo because “collection of oil spills on the lake are not taking place regularly and efficiently.” But Felix Rodriguez, head of western operations of state oil monopoly Petroleos de Venezuela denied there was anything abnormal about the stains.

Energy Minister Rafael Ramirez claims production is back up to 800,000 barrels a day from 200,000 barrels a day, the lowest level since the strike began. Industry sources say output is about 400,000 barrels a day _ from a normal level of 3 million barrels a day.

Chavez has fired almost 300 managers from PDVSA, vowing to use the strike to trim the corporation’s bureaucracy.

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