The government of Venezuela has approved a new tax on cryptocurrency and foreign money transactions

The Venezuelan government has approved a new tax that will apply to foreign money transactions as well as cryptocurrency transactions. The tax, known as the “big financial transactions” tax, was approved by the country’s National Assembly and will collect up to 20% of transactions done in currencies other than the country’s fiat currency or the Petro.

Venezuela’s government is considering levying a tax on cryptocurrency transactions.
The Venezuelan government has authorised a new tax that will effect cryptocurrency and foreign currency transactions and payments. The levy, known as the “major financial transaction” tax, aims to encourage the use of the national currency, which has lost relevance in a multi-currency environment such as the one that has existed in Venezuela in recent years.

The tax stipulates that any transactions or payments conducted in foreign currencies or cryptocurrencies in an unlimited number will be subject to a charge of up to 20%, depending on the nature of the transaction and the organisations or individuals involved.

The national government will choose the percentage to be paid after the law is officially published, but in its first application, it will collect 2.5 percent on these payments.

Recognized Cryptocurrency Volumes And Reactions

 

The inclusion of cryptocurrencies in this law reflects the importance of this type of currency as well as the amount of transactions and payments that take place in the country. Aaron Olmos, a national economist, holds this view. The law’s main goal, however, would be to tax transactions involving dollars, which, according to estimates, account for 65 percent of all activities and payments in the country.

According to Jose Guerra, a Venezuelan economist, this will be a blow to Venezuelans who save their savings in foreign currency and cryptocurrency. Guerra had this to say about it:

It must be acknowledged that foreign currency has solved a portion of the country’s cash concerns, as well as everyone’s value reserves and savings. To some extent, crypto assets as well. This decision is an attempt to favour one method of payment over another.

According to Oscar José Torrealba, head of the country’s Economic Knowledge Dissemination Center, a side effect of this law would be to incentivize the creation of illicit markets to avoid paying the law. According to Torrealba, tax pressure would drive businesses and citizens to transact outside the law.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

Leave a Comment

Your email address will not be published. Required fields are marked *

Facebook
Twitter
Telegram

Recent Posts

Follow Us