Venezuela: a new tax regime of up to 20% on crypto transactions!

A tax frenzy has swept the cryptocurrency markets around the world, with several countries introducing tax regimes for the emerging asset class over the past few weeks, and the government in Venezuela set to impose heavy taxes on crypto payments.

Read also: Two Venezuelan government agencies warn of crypto scams

discourage foreign payments

According to local reports, the new draft tax law aims to extract up to 20% tax of all “Big Financial Transactions”especially foreign exchange and cryptocurrency transactions such as BitcoinIt was reported that the government gave this project the green light in the second discussion that took place last week.

Consumers and small businesses will be required to pay taxes ranging from 2 And 20% on transactions made using any currency, except for those issued by the Venezuelan government, which includes the Venezuelan bolivar as well as oil-backed cryptocurrency El Petrowhich was put forward by the government in 2018.

Read also: Mining in Venezuela is booming under the auspices of low-cost energy

Promote the use of the Bolivar

The main goal of the bill is to generalize the use of the national bolivar, with the value of the paper currency depreciating to almost nothing, having lost nearly 73% of its value in the last year alone, which forced the country to issue a new currency last year, which abandoned the six zeros of the denomination after a long period of high inflation, which led to its devaluation. As stated in the bill:

“It is necessary to ensure equal or more favorable treatment of payments and transactions made in the national currency, or in cryptocurrencies or crypto-assets issued by the Bolivarian Republic of Venezuela, as opposed to payments made in foreign currency.”

The currency devaluation also led to Venezuela being one of the first users of BitcoinMany in the country have turned to digital currency as a hedge against hyperinflation. Venezuela has the third highest adoption of cryptocurrencies worldwide in 2020before the crypto frenzy sweeps across the rest of the world.

Read also: Venezuela is preparing to launch its official digital currency within two months

So much so that the government launched its own oil-backed digital currency in 2018 As a companion to the collapse of the bolivar. But El Petro It failed to impress everyone, even prompting several countries to threaten sanctions.

It should be noted that Venezuela imposed the use of El Petro In paying for services of government documents, and fuel for aircraft flying on international flights.