Peter Howard Wertheim
OGJ Correspondent
RIO DE JANEIRO, Apr. 11 -- Ecuador's Congress has passed the controversial 60% tax on "extraordinary profits" of foreign oil companies.
Ecuador's Minister of Economy Diego Borja Cornejo said the tax would help make up for revenue the government should have received from oil production in 2003 and 2005. He said the new law would generate as much as $500 million in state revenue.
"This is not a violation of any law or the Constitution," Borja said. "Profit margins for foreign companies have been very large, and a tenet in the law that favors the state will result in greater economic equality between foreign companies and the state."
The law becomes effective upon ratification by President Alfredo Palacio.
