Partial Reform of the Decree with Rank, Value and Force of Law on Science, Technology, and Innovation

Partial Reform of the Decree with Rank, Value and Force of Law on Science, Technology, and Innovation

The Partial Reform of the Law on Science, Technology, and Innovation (LOCTI) was published in Official Gazette Special N° 6,693 of 1 April 2022. Please find below the most relevant aspects of this reform:

Subjects to whom the law applies. Article 3 was modified by the Reform. According to article 3, this law applies to the following subjects, which conform the National Science, Technology and Innovation System:

1. The Ministry of the People’s Power with competence in the matter of science, technology, innovation, and its applications, its organs and dependent entities. This is a new numeral included in the reform.

2. All institutions, individuals or entities, public or private, which generate, develop and transfer scientific, technological, innovation, and applied knowledge, and, in general, every entity which favors the economic development and betterment of the goods production processes of the nation.

3. The Ministries of the People’s Power that share, with the Ministry of the People’s Power with competence in mattes of science, technology, innovation, and its applications, the duty to create the social, scientific, and technological conditions for the implementation of the Nation’s Social and Economic Development Plan.

4. The social organizations and People’s Power entities which carry out science, technology, and innovation related activities and its applications. This numeral was modified in the reform.

Definitions. A new article 4 was introduced, which will establish the definitions for relevant terms such as “Science”, “Technology”, “Innovation”, “Scientific Culture”, and “Invention”, among others. Gender focus. The reform includes a new article 5 which sets the competent Ministry’s responsibility to design and implement policies, initiatives, and mechanisms that promote a gender focus, as well as to achieve the incorporation, participation, and primacy of women and associated social movements.

Likewise, the governing body must promote programs and projects for the identification and preparation of women at the highest levels of science, technology, innovation, and their applications.

National Science, Technology, and Innovation System. Title II has been changed to now be called “National Science, Technology, and Innovation System”. Likewise, article 12 defines said System as the “total array of subsystems and actors that interact and cooperate, harmoniously, according to the principles and norms which allow for prioritizing, directing, and articulating public policies with the purpose of incrementing scientific, technological, and innovation capacities, with a vision of transforming production and industrial processes in order to contribute to the economic and social development of the country.”

National Scientific, Technological, and Innovation Plan. Article 8 of the reform states the creation of the National Scientific, Technological, and Innovation Plan which will indicate, in a systemic manner, the policies, objectives, strategies, and goals to achieve the purposes stated in the National Economic and Social Development Plan.

Spaces for investigation and innovation. According to article 12 of the reform, the LOCTI will gain a new article 20, by which the governing body in the matter of science, technology, and innovation is tasked with creating and strengthening the spaces that it considers necessary for achieving the strategic objectives set out in the National Scientific, Technological, and Innovation Plan.

Investment and Financing for the Development of Science, Technology, and Innovation and its Applications. Article 19 of the reform included a new article 27 into the LOCTI, which defines the necessary investment required for the promotion of science, technology, and innovation with the goal of guaranteeing the safety of the nation, as well as its sovereignty, and the concordance of objectives with the National Scientific, Technological, and Innovation Plan.

The contributions (taxes). According to the new article 30 of the LOCTI, public and private entities, domiciled in Venezuela or not, that carry out economic activity within the country and have amassed gross income of more than one hundred and fifty thousand (150,000) times the currency of highest value according to the Venezuelan Central Bank in the immediately previous fiscal period will be the contributors (taxpayers) for investment in science, technological, innovation and its applications.

Amounts of contributions. According to the new article 30 of the LOCTI, the contribution will be a percentage of the taxpayer’s gross income in the previous monthly fiscal period, and will be determined according to their economic activity, as follows:

1. Two percent (2%) when the economic activity is regulated by the Law for the Control of Casinos, Bingo Rooms, and Slot Machines, as well as all those activities related to the production, commerce, and sale of ethylic alcohol, alcoholic variants and tobacco.

2. One percent (1%) in the case of companies with private capital, when their economic activity is one of the activities described in the Law on Hydrocarbons, the Law on Gaseous Hydrocarbons, and the Decree Organic Law which reserves to the State the Exploration and Exploitation of Gold and other Strategic Minerals.

3. Cero point five percent (0.5%) in the case of public capital companies when their economic activity is one of the ones described in the the Organic Law on Hydrocarbons, the Organic Law on Gaseous Hydrocarbons, and the Decree Organic Law which reserves to the State the Exploration and Exploitation of Gold and other Strategic Minerals.

4. Cero point five percent (0.5%) in the case of companies dedicated to different activities than those previously described in the above numerals.

Entry into force. This Partial Reform of the LOCTI entered into force upon its publication in the Official Gazette, on Friday, April 1st, 2022.