Chapter I: Socioeconomic Order and the Function of the State in the Economy

Article 299: The economic regime of the Bolivarian Republic of Venezuela is based on the principles of social justice, democratization, efficiency, free competition, protection of the environment, productivity and solidarity, with a view to ensuring overall human development and a dignified and useful existence for the community. The State, jointly with private initiative, shall promote the harmonious development of the national economy, to the end of generating sources of employment, a high rate of domestic added value, raising the standard of living of the population and strengthen the economical sovereignty of the country, guaranteeing the reliability of the law; the solid, dynamic, sustainable, continuing and equitable growth of the economy to ensure a just distribution of wealth through participatory democratic strategic planning with open consultation.

Article 300: National laws shall establish the conditions for the creation of functionally decentralized entities to carry out social or entrepreneurial activities, with a view to ensuring the reasonable economic and social productivity of the public resources invested in such activities.

Article 301: The State reserves to itself the use of trade policy to protect the economic activities of public and private Venezuelan enterprises. Business enterprises, organs or persons of foreign nationality shall not be granted with regimes more advantageous than those established for Venezuelan nationals. Foreign investment is subject to the same conditions as domestic investment.

Article 302: The State reserves to itself, through the pertinent organic law, and for reasons of national expediency, the petroleum industry and other industries, operations and goods and services which are in the public interest and of a strategic nature. The State shall promote the domestic manufacture of raw materials deriving from the exploitation of nonrenewable natural resources, with a view to assimilating, creating and inventing technologies, generating employment and economic growth and creating wealth and wellbeing for the people.

Article 303: For reasons of economic and political sovereignty and national strategy, the State shall retain all shares of Petróleos de Venezuela, S.A. or the organ created to manage the petroleum industry, with the exception of subsidiaries, strategic joint ventures, business enterprises and any other venture established or coming in the future to be established as a consequence of the carrying on of the business of Petróleos de Venezuela, S.A.

Article 304: All waters are property in the Nation's public domain, essential to life and development. The necessary provisions shall be established by law to guarantee the protection, utilization, and recuperation thereof, respecting the phases of the hydrological cycle and zoning criteria.

Article 305: The State shall promote sustainable agriculture as the strategic basis for overall rural development, and consequently shall guarantee the population a secure food supply, defined as the sufficient and stable availability of food within the national sphere and timely and uninterrupted access to the same for consumers. A secure food supply must be achieved by developing and prioritizing internal agricultural and livestock production, understood as production deriving from the activities of agriculture, livestock, fishing and aquiculture. Food production is in the national interest and is fundamental to the economic and social development of the Nation. To this end, the State shall promulgate such financial, commercial, technological transfer, land tenancy, infrastructure, manpower training and other measures as may be necessary to achieve strategic levels of self-sufficiency. In addition, it shall promote actions in the national and international economic context to compensate for the disadvantages inherent to agricultural activity.

The State shall protect the settlement and communities of nonindustrialized fishermen, as well as their fishing banks in continental waters and those close to the coastline, as defined by law.

Article 306: The State shall promote conditions for overall rural development, for the purpose of generating employment and ensuring the rural population an adequate level of well-being, as well as their inclusion in national development. It shall likewise promote agricultural activity and optimum land use by providing infrastructure projects, supplies, loans, training services and technical assistance.

Article 307: The predominance of large land estates is contrary to the interests of society. Appropriate tax law provisions shall be enacted to tax fallow lands and establish the necessary measures to transform them into productive economic units, likewise recovering arable land. Farmers and other agricultural producers are entitled to own land, in the cases and forms specified under the pertinent law. The State shall protect and promote associative and private forms of property in such manner as to guarantee agricultural production. The State shall see to the sustainable ordering of arable land to guarantee its food-producing potential.

In exceptional cases, quasi-tax contributions shall be created to provide funds for financing, research, technical assistance, transfer of technology and other activities that promote the productivity and competitiveness of the agricultural sector. These matters shall be appropriately regulated by law.

Article 308: The State shall protect and promote small and medium-sized manufacturers, cooperatives, savings funds, family-owned businesses, small businesses and any other form of community association for purposes of work, savings and consumption, under an arrangement of collective ownership, to strength the country's economic development, based on the initiative of the people. Training, technical assistance and appropriate financing shall be guaranteed.

Article 309: Typical Venezuelan crafts and folk industries shall enjoy the special protection of the State, in order to preserve their authenticity, and they shall receive credit facilities to promote production and marketing.

Article 310: Tourism is an economic activity in the national interest, and represents a high priority in the country's strategy of diversification and sustainable development. As part of the foundation of the socioeconomic regime contemplated by this Constitution, the State shall promulgate measures to guarantee the development of tourism. The State shall see to the creation and strengthening of a national tourist industry.

Chapter II: Tax and Monetary System

Section One: Budget System

Article 311: Fiscal Policy shall be governed and implemented on principles of efficiency, solvency, transparency, responsibility and fiscal balance. Fiscal Policy is to be balanced over a multiyear budget framework, in such manner that ordinary revenues shall be sufficient to cover ordinary expenses.

The National Executive shall submit for enactment by the National Assembly a multiyear framework for budgeting that establishes the maximum limits of expenditures and indebtedness to be contemplated in national budgets. The characteristics of this framework, the requirements for modifying the same and the terms for carrying out the same shall be established by law.

Any revenues generated by exploiting underground wealth and minerals, in general, shall be used to finance real productive investment, education and health.

The principles and provisions established for national economic and financial management shall also govern that of the States and Municipalities, to the extent applicable.

Article 312: Public debt limits shall be set by law in accordance with a prudent level in terms of the size of the economy, reproductive investment and the ability to generate revenues to cover public debt service. In order to be valid, public credit transactions shall require a special law authorizing them, with the exceptions established under the pertinent organic law. The special law shall indicate the modalities of the transactions and authorize the appropriate budget credits in the pertinent budget law.

The annual special indebtedness law shall be submitted to the National Assembly together with the budget law.

The State shall not recognize any obligations other than those assumed by lawful National Authority organs in accordance with law.

Article 313: The economic and financial management of the State shall be governed by a budget approved annually by law. The National Executive shall submit the draft Budget Act to the National Assembly, at the time prescribed by the organic act. If the Executive Power fails for any reason to submit the budget bill within the time limit established by law, or the bill is rejected, the budget for the current fiscal year shall remain in effect.

The National Assembly shall have the power to alter budget items, but shall not authorize measures leading to a decrease in public revenues or to expenses exceeding the estimated revenue amounts in the budget bill.

In submitting the multiyear budget framework, the special indebtedness law and the annual budget, the National Executive Branch shall explicitly state the long-term objectives of fiscal Policy and explain how these objectives are to be achieved, in accordance with principles of responsibility and a fiscal balance.

Article 314: No expense of any kind shall be disbursed unless the same has been provided for in the budget law. Additional budget credit items may be ordered to cover essential unforeseen expenses or items that had not been adequately funded, only if the treasury has resources to cover the expenditure concerned; this shall be done only following a vote in favor by the Cabinet of Ministers and authorization by the National Assembly, or in its absence, by the Delegated Committee.

Article 315: In the annual public expense budgets at all levels of government, the specific objective to which each credit item in the budget is addressed shall be clearly established, as well as the concrete results expected and the public officials responsible for achieving these results. The latter shall be established in quantitative terms, by means of performance indicators, where this is technically possible. The Executive Power shall submit to the National Assembly within six months of the close of the fiscal year the annual accounting and budget implementation balance sheet for such fiscal year.

Section Two: Taxation System

Article 316: The taxation system shall seek a fair distribution of public burdens in accordance with the taxpayer's ability to pay, taking into account the principle of progressive taxation, as well as protection of the national economy and raising the standard of living of the population, the foundation therefore being an efficient system for the collection of taxes.

Article 317: No tax, assessment or contribution of any kind shall be collected unless it is established by law, and no exemptions, abatements or other types of tax incentives shall be granted except as provided for by law. No tax shall have a confiscatory effect.

No tax obligations payable in personal services shall be established. Tax evasion may be punished as a criminal offense, without prejudice to other penalties established by law.

In case of officials they shall be punished double.

Every tax law shall specify the interval that is to lapse before it goes into effect. In the absence of such provision, the period shall be understood as being 60 calendar days. This provision shall not restrict the extraordinary powers to be granted by the National Executive in the cases provided for by this Constitution.

The national tax administration shall enjoy technical, operating and financial autonomy in accordance with legislation approved by the National Assembly, and its maximum authority shall be designated by the President of the Republic, in accordance with the rules laid down in the pertinent law.

Section Three: National Monetary System

Article 318: The monetary competence of National Authority shall necessarily be exercised exclusively by the Venezuelan Central Bank. The fundamental objective of the Venezuelan Central Bank is to achieve price stability and preserve the internal and foreign exchange value of the monetary unit. The monetary unit of the Bolivarian Republic of Venezuela is the Bolívar. In the event a common currency is instituted within the framework of Latin American and Caribbean integration, it shall be permissible to adopt the currency provided for by a treaty signed by the Republic.

The Venezuelan Central Bank is a public-law juridical person with autonomy to formulate and implement policies within its sphere of competence. The Venezuelan Central Bank shall perform its functions in coordination with general economic policy, in the interest of attaining the higher objectives of the State and the Nation.

In order to provide for the adequate attainment of its objective, the functions of the Venezuelan Central Bank shall include those of formulating and implementing monetary policy, participating in the design of and implementing foreign exchange policy, currency regulation, credit and interest rate, administrating international reserves and any others established by law.

Article 319: The Venezuelan Central Bank shall be governed by the principle of public responsibility, to which end it shall render an accounting of its actions, goals and the results of its policies to the National Assembly, in accordance with law.

It shall also issue periodic reports on the behavior of the country's macroeconomic variables and on any other matters concerning which reports may be requested, including sufficient analysis to permit its evaluation. Failure to meet the objective and goals, without justifiable cause shall result in removal of the Board of Directors and imposition of administrative penalties, in accordance with law.

The Venezuelan Central Bank shall be subject to oversight after the fact by the Office of the General Comptroller of the Republic and inspection and supervision by the public entity that supervises banking, which shall send to the National Assembly reports on the inspections it conducts. The budget of operating expenses of the Venezuelan Central Bank shall require discussion and approval by the National Assembly, and its accounts and balance sheets shall be subjected to independent audits on such terms as may be established by law.

Section Four: Macroeconomic Coordination

Article 320: The State shall promote and defend economic stability, prevent the vulnerability of the economy and see to monetary and price stability, in order to ensure the welfare of society.

The ministry responsible for finance and the Venezuelan Central Bank shall contribute to the harmony between fiscal and monetary policy, thereby facilitating the attainment of macroeconomic objectives. In performing its functions, the Central Bank of Venezuela shall not be subject to directives from the National Executive and shall not be permitted to endorse or finance deficit fiscal policies.

The coordinated actions of the National Executive and the Venezuelan Central Bank shall be achieved through an annual policy agreement which shall establish the final growth objectives and their repercussion on society, the external balance of payments and inflation, as regards fiscal, foreign exchange and monetary policy; as well as the levels of intermediate and instrumental variables required in order to achieve the aforementioned final objectives. This agreement shall be signed by the President* of the Venezuelan Central Bank and the head of the ministry responsible for finance, and shall be made public at the time of approval of the budget by the National Assembly. It is the responsibility of the signers of the agreement to see that policy actions are consistent with the objectives. The aforementioned agreement shall specify the results expected and the policies and actions designed to achieve the same. The characteristics of the annual economic policy agreement and the mechanisms for submitting an accounting shall be established by law.

Article 321: A macroeconomic stabilization fund shall be established by law for the purpose of guaranteeing the stability of the State's expenses at the national, regional and municipal levels, in the face of fluctuations in ordinary revenues. The operating rules for this fund shall observe the basic principles of efficiency, fairness and nondiscrimination as between the public organs contributing resources to the fund.