Venezuela to implement a 20% tax on cryptocurrency transactions

A new tax will also be imposed on transactions with foreign fiat currencies

07.02.2022 - 12:10

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What’s new? The Venezuelan government has approved a 20% tax that will apply to payments and transactions made using cryptocurrencies other than Petro and foreign fiat currencies. This is according to a message on the website of the country’s National Assembly.

Message on the National Assembly of Venezuela website

What was the purpose of the new tax implementation? The Venezuelan authorities have decided to tax cryptocurrency transactions because the local currency, the bolivar, has become less in demand amid their popularity.

The government notes that it recognizes the importance of digital assets, but the main purpose of the new tax is to mainstream the national currency, as well as “displace” the US dollar. The US currency now accounts for 65% of all payments in Venezuela.

“The rich and big businesses put dollars in their pockets and don’t hand over to the Venezuelan state even one cent of those dollars which they use for transactions,” noted Venezuelan Parliament Speaker, Jorge Rodriguez.

What do the experts say? Oscar Torrealba, head of the Economic Knowledge Dissemination Center research organization, remarks that Venezuelan citizens will try to avoid paying taxes. This will lead to the creation of a black crypto market, the analyst is sure.

What had happened before? At the end of January, was mentioned that Venezuela’s Vice Minister for Special Economic Zones, Juan Arias, promoted the use of cryptocurrencies to protect investors from direct sanctions from the international community. He said that the government’s encouragement of crypto operations will make it easier to attract national and international investors to participate in government projects.

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