Venezuelan President Hugo Chavez says he will slash the nation's value added tax.
In a nationally televised broadcast Thursday, Mr. Chavez said the move is designed to bring down the nation's inflation rate, which at 17 percent last year was the highest in Latin America.
Mr. Chavez said he will lower the value added tax by more than half by July, a measure that will cost the government nearly $4 billion (eight trillion bolivars) per year. The president said he will make up the difference with other taxes, possibly on privately-held assets.
Mr. Chavez also said he would slash three zeroes off the nation's currency - so that a 1,000 bolivar note would be a one bolivar coin. The move would be a symbolic one, meant to evoke a stronger economy.
The Venezuelan president has faced criticism for last year's inflation rate and has been fighting to keep food costs low.
Earlier this week he said he would nationalize private supermarkets and food storage facilities caught violating price controls.
Mr. Chavez said he would seize businesses if they insist on violating what he called "the interests of the people, the constitution and the laws."
Basic goods such as sugar, milk and meat have been in short supply in recent months. Industry officials blame the shortages on government price controls that leave them unable to make a profit.
In January, Venezuela's Congress granted President Chavez the power to rule by decree for 18 months. He has vowed to use his powers to nationalize utilities and other sectors of the economy.
In detailing his reduction of the value added tax Thursday, Mr. Chavez said the current rate of 9.5 percent will be reduced three percentage points on March 1 and then two more points on July 1.Some information for this report was provided by AP and Reuters.