The Venezuela state government now requires operators with crypto business in the country and overseas operators dealing in foreign countries to pay relevant taxes using cryptocurrency to boost the economy.

The move further illustrates the move towards digital currencies, as the value of the bolivar continues to fall. Given the economic crisis, Bitcoin has fast become a financial refuge for many nationals, with President Nicolás Maduro struggling to save the economy from going under from highly unsustainable inflationary situations and an ineffective and largely invisible introduction of the oil-backed Petro, Venezuela’s national digital currency.

The new decree states: “The Venezuelan people are currently facing a fierce war waged by internal and external factors that pursue the deterioration of the economy, which is why it is necessary to adopt sufficient measures to ensure the strengthening of the current fiscal regime.”

The Ministry of Popular Power of Economy and Finance is already putting the new legislation in place which will attempt to enforce the Petro as the only tax payment system for this particular group. The only exemptions to the new rule, according to the decree, will be transactions of securities traded on a stock exchange and “the export of goods and services, carried out by public bodies or entities”.

It appears that those “who carry out operations” in foreign currencies or cryptocurrencies as authorized by the law can also pay their taxes in foreign currency as well as digital currency. Normal taxpayers won’t be billed in Petro, as some believed would happen after an announcement by one state region declaring that cryptocurrency would be the new mode of payment for taxes. Tax refunds will be repaid in bolivar, the nation’s fiat currency.

Jean Carlos Martínez, representing the Service Desconcentrado de Administración Tributaria (Sedemat), clarified that “taxpayers will not be charged taxes in Petros”. He explainted that Petro would only be used as a reference unit to determine minimum tax, as “the ordinance of the current economic unit is still stipulated in percentages of gross income”.

He explained that those conducting transactions in Petro, Bitcoin or other currency, should declare their income according to the currency that they use. Als,o he clarified that the Petro has two uses, one as a cryptocurrency and the other “as a unit of account that translates into 9,000 sovereign bolivars, which will be used in passport procedures or current salaries”.

 

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