Sunday, September 25, 2022

Venezuelan Government Passed a New Law to Enforce 20% Tax on Cryptocurrency Transactions

The Venezuelan government is looking to reform the tax law by passing a bill seeking that transactions in cryptocurrencies be taxed at the range of 2% to 20%. The reformed law was passed to favor the country’s currency and economic value which declined 73% in the past year, according to a report by Aljazeera.

According to the readings on the bill passed into law, the Venezuelan government is said to have laid a “framework” that it said is;

“Necessary to guarantee treatment at least equal to, or more favourable, to payments and transactions made in national currency or cryptocurrencies or crypto assets issued by the Bolivarian Republic of Venezuela versus payments made in foreign currency,” the report on the passed bill reads, “the project applies the tax for these transactions with a rate ranging from 2% to 20%, starting at 2.5% for all foreign exchange or currency transactions abroad until the National Executive establishes a different rate”.

The new decree is to ensure growth in the country’s economic system. By this, the government hopes to fight the inflation caused by the devalued currency.

Another Attempt to Place a Regulation on Cryptocurrency

Venezuela is another country that is putting strict measures on the cryptocurrency space taxation system, a move that takes similarity to an earlier report on  Cryptomarketsbeat which detailed Colombia’s enforcement to tighten and eliminate tax evasion in the country. 

Although the reasons stated for this tax enforcement seem to be different, it all still links up to setting regulations on crypto space, as this measure passed into law by the Venezuelan government could lead to regulations that can help in eradicating all tax evaders.

Clearly, the massive adoption of cryptocurrency in Venezuela by local businesses that are trying to survive the hyperinflation rate in the country has become a threat to the valuation of its currency. To increase the use of the nation’s currency, the authorities believe the law has to be passed to create or increase the level of user preference, which could, in turn, initiate the objectives.

Bright Felix
Bright Felix is a Blockchain and Cryptocurrency journalist, and also a Financial Analyst in the foreign exchange market, who fancies writing about the innovative proceedings of Blockchain technology and its application in real life to further broaden the general acceptance and incorporation of the modern technology. His passion to instil knowledge in people on the aspect of the present invention on the Blockchain space is what motivates his adept participation in every area that contributes to expanding the awareness of Blockchain technology.

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