Venezuela Wants Citizens to Pay Taxes in State-Issued Petro Cryptocurrency

Lucas Cacioli  Aug 12, 2020 18:00  UTC 10:00

2 Min Read

Venezuela is moving on a mandate that could see taxes being collected using its state-issued cryptocurrency—the oil-backed Petro. The effort is part of a nation-wide campaign to create mainstream use cases for Venezuela’s cryptocurrency.

In Venezuela, the Bolivarian Council of Mayors has signed off on the “National Tax Harmonization Agreement” which is a campaign to mandate the use of Petro cryptocurrency in tax collection and payments.

According to the announcement, an overwhelming majority of 305 mayors and municipality representatives have voted for the new crypto tax collection mechanism, with 30 mayors opting for fiat-based tax collection.

The campaign is being led by Venezuela’s Vice President Delcy Rodriguez who also leads the implementation of a new information exchange and monitoring system to allow companies to pay their taxes using the state-issued cryptocurrency.

Rodriguez said, “It is the simplification of procedures, making the State’s administrative activity at the service of the people more efficient, of the economic sectors that stimulate economic activity.”

Venezuelan Push For Petro Adoption and Usage

Over the last few years, Venezuela has been combating hyperinflation which has put the nation under extreme economic duress.

Since 2018, the Venezuelan administration of President Nicolas Maduro has used every opportunity to boost the adoption of its national oil- backed Petro cryptocurrency to circumvent the hyperinflation, even leveraging the COVID pandemic crisis to further airdrop the currency to doctors in the nation.

In addition, the Venezuelan government is accepting passport payments with the Petro and its oil companies are also seeking payment in the state-backed cryptocurrency. The country reported that 15 percent of all fuel payments in the country were now utilizing Petro.

Corruption and Sanctions

Venezuela is still facing harsh sanctions from the global community, particularly the United States for allegations of deep corruption in the South American nation’s government. In March 2020, the United States Department of Justice (DOJ) alleged that Venezuelan President Nicolas Maduro leveraged crypto in the illegal drug trade.

Maduro along with 14 other high-ranking Venezuelan officials was been charged for his alleged involvement in a multibillion-dollar cocaine trafficking ring that the DOJ claimed wreaked havoc on American communities by flooding the markets with cocaine for over 20 years. The allegations extend to drug runners, Colombian cartels, and the overall corruption that has plagued Venezuala’s governance.

“These indictments expose the devastating systemic corruption at the highest levels of Nicolas Maduro’s regime,” said DEA Acting Administrator Uttam Dhillon. “These officials repeatedly and knowingly betrayed the people of Venezuela, conspiring, for personal gain with drug traffickers and designated foreign terrorist organizations like FARC. These enforcement actions send a clear message to corrupt officials everywhere that no one is above the law or beyond the reach of US law enforcement.”


Image source: Shutterstock

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