Venezuelan Government Approves New Tax on Cryptocurrency and Foreign Currency Transactions –

The Venezuelan government has approved a new tax that would affect foreign currency and cryptocurrency transactions. The tax approved by the country's National Assembly, dubbed the "major financial transaction tax," would levy up to 20% on transactions made in currencies other than the national fiat currency or the petro.

Venezuelan government taxes crypto transactions

The Venezuelan government has approved a new tax that will impact transactions and payments involving cryptocurrencies and foreign currencies. The tax, dubbed the “major financial transaction tax,” is intended to incentivize the use of local currency, which has become less important in a multi-currency environment like this Gift in Venezuela in recent years.

The tax stipulates that all transactions or payments in foreign currencies or cryptocurrencies must pay up to 20% per movement, without quantity limits, depending on the type of movement and the companies or individuals carrying out it.

The percentage to be paid will be determined by the national government after the official publication of the law, but upon its first application it will charge 2.5% on these payments.

Detected cryptocurrency volumes and reactions

The inclusion of cryptocurrencies in this law is a recognition of the importance of this type of currency and the volume that moves in the country in terms of transactions and payments. This is the opinion of Aaron Olmos, a political economist. However, the main goal of the law would be to tax transactions in dollars, which are estimated to account for 65% of operations and payments in the country.

Jose Guerra, a Venezuelan economist, believes this will be a hit in the pockets of Venezuelans who use foreign currencies and cryptocurrencies to store their savings. About that, Guerra specified:

It must be recognized that foreign exchange has solved part of the problems of cash, reserves of value and savings of everyone in the country. To a certain extent, crypto assets too. Making this decision attempts to favor one payment method over another.

Another side effect of this law would be the incentive to create black markets to avoid paying this law. according to to Oscar José Torrealba, director of the country's Center for the Dissemination of Economic Knowledge. Torrealba explained that merchants and people were acting outside the law, encouraged by tax pressure.

What do you think of this new tax introduced by the Venezuelan government? Tell us in the comments section below.

Sergio Goschenko

Sergio is a cryptocurrency journalist based in Venezuela. He describes himself as late to the game, entering the cryptosphere when the price surge occurred in December 2017. He has a background as a computer engineer, lives in Venezuela and is affected by the cryptocurrency boom on a social level. He offers a different perspective on crypto success and how it helps the unbanked and underserved.

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