The estimated tax (expense) benefit consists of the following:   Years ended September 30,   1999 1998 1997   (Thousands of U.S. dollars) Current income tax - (126) (747) Business assets tax (320) (1.222) (468) Deferred income tax 10 (935) 5.005 Total tax benefit (expense) (310) (2.283) 3.790 Income tax - For the Venezuelan subsidiaries differences between the amount of income taxes computed at the statutory regular tax rate of 34% and the effective income tax rates for the years result from inflation-adjustments for Venezuelan tax purposes described below, dividends from subsidiaries, intercompany transactions, income from foreign sources and the requirement that Venezuelan income taxes be based on the underlying bolivar accounts of each Venezuelan company on an individual basis as follows:   Years ended September 30,   1999 1998 1997   % % % Statutory income tax rate (%) 34,0 (126) (747) Increase (decrease) in tax rate resulting from: Remeasurement into U.S. dollars for accounting purposes and effect of taxes assessed in bolivars 55,5 64,3 (6,0) Inflation adjustment for tax purposes (66,6) (79,1) (46,1) Non taxable income (15,5) (0,6) - Other, net (9,6) (5,4) 0,4 Effective income tax rate (%) (2,2) 13,2 (17,7) For the Venezuelan subsidiaries, beginning in fiscal 1993, an annual inflation-adjustment is required which may result in an increase or decrease in taxable income. The Venezuelan Tax Law provided that the new values resulting from the inflation adjustments are to be depreciated over the remaining useful lives of the fixed assets. In accordance with SFAS N° 109, no deferred tax asset was recorded for the future benefits of the inflation adjustments. The Cayman Islands levy no taxes on income, dividends or capital gains. As a result of the Fior contributions and transfers of assets (see Note 1), under Venezuelan Tax Law the tax basis of the property, plant and equipment transferred by Fior was increased. Such increase is not recorded in the financial statements. However, a deferred tax asset of US$4.8 million was recorded during 1997 to recognize the future Venezuelan tax benefit of the additional depreciation. This asset was included in the transfer of assets indicated in Note 1. The Venezuelan Income Tax Law provides for tax losses and tax credits from new investments to be carried forward over the following three years, to reduce income taxes payable. At September 30, 1999, IBH's subsidiaries had tax loss carry-forwards amounting to Bs 3,404 million (equivalent to US$5.4 million), of which Bs 808 million is available to offset taxable income until the end of fiscal 2002, Bs 2,493 million until the end of fiscal 2001 and Bs 103 million until the end of fiscal 2000. IBH's subsidiaries also had investment tax credits amounting to Bs 1,553 million (equivalent to US$2.5 million) at September 30, 1999, of which Bs 1,548 million may be applied against income tax liability until the end of fiscal 2002 and Bs 5 million until the end of fiscal 2001. Utilization of these tax loss carry-forwards and investment tax credits is dependent on realizing future taxable income in the appropriate company. Deferred tax assets relating to these tax loss carry-forwards and investment tax credit have been reduced by a valuation allowance representing the portion of those assets for which it is more likely than not they will not be realized. Changes in the valuation allowance from year to year were due to changes in the amounts of deferred tax assets to which it relates. The components of net deferred income tax assets (liability) are as follows:   As of September 30,   1999 1998   (Thousands of U.S. dollars) Investments tax credits 2.473 29 Tax loss carry-forwards 1.844 1.935 Business assets tax credits 2.160 1.251 Uncollected income from draw backs (624) (680) Allowances and provisions not deductible until paid 774 815 Other , net 89 80   6.716 3.430 Valuation allowance (6.722) (3.446) Net deferred income tax liability, include in other liabilities (6) (16) Business assets tax The Venezuelan business assets tax was enacted as a supplementary tax to the Venezuelan income tax and is calculated on the basis of the simple average of the taxpayer's tangible and intangible assets situated in Venezuela which were involved in the production of income from commercial and industrial activities. The tax rate applicable to the asset base is 1% a year, reduced by the percentage of export sales to total sales. This tax and the income tax are calculated together and the greater of the two is the tax liability. A business asset tax expense of US$320,000 was recorded during the year ended September 30, 1999 (US$1,222,000 in 1998). The payment of this tax may be applied as a tax credit against any income tax liability incurred over the next three fiscal years. Wholesale and luxury tax In 1994 the Wholesale and Luxury Tax (ICSVM) Decree-Law was enacted. This tax is based on a tax credit system and applies to the different stages of production and sales. It is payable based on the value added at each stage. This system incorporated additional tax rates of 10% and 20% over goods and services considered as luxury items. The ICSVM tax rate was set annually in the Budget Law, which until May 1999 was 16.5%. The Law provides for a special tax rate (0%) for exporters, granting them the right to recover tax credits from the purchase or import of goods and services based on the ratio of export sales to total sales. In May 1999 the Venezuelan government, through a Decree-Law, repealed and substituted the ICSVM tax for the value added tax (VAT). The VAT tax kept the same ICSVM structure, but certain changes were made, namely: 1) the applicable tax rate, which was set at 15.5% for 1999, effective as from June 1; 2) the elimination of additional tax rates and; 3) modification of the system for the recovery of credits by exporters, including the possibility of offsetting or transferring tax credits when the tax administration does not provide a decision within the term set forth; the special tax rate (0%) for exporters is still applied. At September 30, 1999, accounts receivable include tax credits of some US$4,662,000 (US$3,215,000 in 1998) from the value added tax and wholesale and luxury tax (see Note 3), of which US$3,984,000 (US$2,393,000 in 1998) correspond to recoverable credits from export operations. Bank debit tax In May 1999 the Venezuelan government, through a Decree-Law, enacted the bank debit tax, which mainly levies debits or withdrawals made on current and savings accounts, custody deposits, or on any other type of demand deposit. Bank debit tax is also applied to liquid assets funds, trust funds and other financial market funds or financial instruments transacted by individuals or corporations with Venezuelan banks and financial institutions. The bank debit tax amounts to 0.5% and will be in effect for one year. In the year ended September 30, 1999, IBH incurred in bank debit tax expenses amounting to Bs 67 million (equivalent to US$109,000).