Venezuela announces 20% tax levy

TL; DR Breakdown

• Venezuela levy 20% crypto tax payments on transactions
• The bill will push the adoption of the Petro
• Venezuela wants a fairground between crypto and Petro

The crypto sector has been doing a spectacular job of delivering profits to traders and market participants for a while now. Although most governments find it hard to regulate the sector, they are levying crypto tax on the users. One such is Venezuela, which has announced a levy of 20% tax on all crypto transactions. According to reports from local news stations, the decision was discussed last week at a second sitting.

Crypto tax will push the adoption of the Petro

At the National Assembly sitting, the lawmakers deliberated on the angle of a crypto tax on huge transactions involving digital assets like Bitcoin and Ethereum. After the discussion, a draft bill was signed, which means that firms and traders will pay a crypto tax of 20%. The draft bill still went as far as adding trades made using the United States dollars.

The law was filed on January 20, and it seeks to levy a tax of up to 20% on transactions using any currency apart from the one issued by the country’s central bank to carry out trades. One of the aims of the draft bill is to push people back to adopting its local currency over digital assets. Going by records, the Petro lost more than 70% of its value last year, with the currency now in deep waters in one decade.

Venezuela wants a fairground between Petro and crypto

The crypto tax bill recognizes digital assets and what they stand for in the financial market. However, it wants to create a level field between its native currency and other digital assets in the market. It also wants to encourage payments to be made using the Petro instead of digital assets or other foreign currencies like the dollar.

According to recent reports, Bitcoin adoption has been rising across the world. However, Venezuela ranks as one of the top countries where the adoption has been noticed. The country’s citizens fear impending harsh realities of inflation, hence the move to hold their balances in the digital asset. To further push adoption, an airport announced that it would look into accepting digital assets for flight payments.