Venezuela establishes a surcharge of up to 25% on purchases with non-Petro cryptocurrencies.
The National Constituent Assembly of Venezuela has reformed the Value Added Tax (VAT) Standard. The entity has established a 5% to 25% surcharge for purchases with cryptocurrencies other than Petro, a state cryptocurrency, which remains exempt from additional taxes. The same tax will also apply to purchases made in foreign currencies.
In addition, the previous fixed rate of 16% will fluctuate between 8% and 16.5%. This means that the total tax for the purchase of cryptocurrencies can reach 41.5%, if the maximum values are applied. Article 27 of the VAT Law states:
“An additional fee will be applied, which can be modified by the National Executive and will be between a minimum limit of 5% and a maximum of 25% to goods and services paid in foreign currency, cryptocurrencies other than the cryptocurrency issued and backed by the Bolivarian Republic of Venezuela ".
According to the Banking and Business news portal, which reported the news on January 29, the decree is part of a partial reform of the Organic Tax Code (COT). The new tax system will enter into force when it appears in the Official Gazette.
The measure clearly aims to reduce the use of assets that have become popular in the country and have shown significant growth. Bitcoin, for example, reached a trading volume of more than $ 300 million on the local LocalBitcoins platform in 2019. This represents a 33.2% growth over the previous year.
In addition, from May to December 2019, the country registered a 562% increase in the number of users with active wallets of the Dash cryptocurrency, only in December 2019, the increase was 29%.
On the other hand, the government also wants, with the measure, to boost transactions with Petro, a cryptocurrency created by the government of Nicolás Maduro, who, according to him, is backed by Venezuelan oil. The asset is also an attempt by the government to bypass economic sanctions and reduce dependence on the dollar.
