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Liquor rush in Venezuela

Staff writer |
Venezuelans are swarming liquor stores after a soon-to-be 15 percent hike on luxury goods was announced on liquor, but not beer.

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The country is upping its tax on luxury goods from 10-15 percent, affecting the market for yachts, planes, and fancy cars but also those who indulge in alcohol.

Beyond tobacco and alcohol, the government is raising taxes on all luxury goods worth more than $30,000. The measure was one of 28 new laws decreed to bolster the country's economy. Venezuela is a member of the Organization of the Petroleum Exporting Countries and is strapped for cash as oil prices have dropped to a four-year low.

Many free market economists said the problem is Venezuela's steep price and currency controls that have created a shortage of dollars that have made it harder to import goods.

Along with these new laws, Venezuelan President Nicolás Maduro ordered that a $4 billion loan from China be included in the foreign reserves. This will bring much needed revenue to the country's foreign reserves which have reached an 11-year low.


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