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Venezuela will use the Petro as a unit of account for taxes

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Although this could be a complete challenge, the mayors of 305 municipalities have agreed to use the petro as a unit of account for paying taxes.

Expanding the adoption of the Petro

The Bolivarian Council of Mayors of Venezuela has signed a “National Tax Harmonization Agreement” for 305 municipalities in the country, through which resident citizens can pay taxes and fines using the state’s cryptocurrency.

As is quite evident, the objective of this campaign is to continue expanding the usability of the Petro.

In this sense, Vice President Delcy Rodríguez, described the agreement as “historic.” Rodríguez will be in charge of implementing a single registry for all taxpayers.

In addition, Delcy Rodríguez must create a system for the exchange of information and monitoring of the companies in order to monitor the payments made.

This tax harmonization agreement, which we reached after a great debate among the 305 Bolivarian mayors, is an unprecedented event in our country“Said Mayor Erika Farías.

According to Rodríguez, this agreement will achieve a greater simplification of procedures, increasing the efficiency of the State.

Are they all the municipalities in the country?

The answer is no; Venezuela is made up of a total of 335 municipalities, that is, 30 of them did not participate in the agreement. And it is those 30 municipalities that are led by mayors who are opposed to the Nicolás Maduro regime.

In the case of those 30 municipalities, they will continue to collect taxes in the national currency, which is the Bolívar. Which is important given that, as Rodríguez pointed out, the prohibition of collecting taxes and duties in foreign currency was established.

The reason these 30 municipalities do not join the agreement is due to the lack of technological infrastructure to process payments in Petro.

A strategy

The news must be taken with caution. Without context of the country’s situation, we could come to think that this is good news for the crypto market and that Venezuela is the nation of crypto, but the reality is much more complex.

Venezuela has seen a significant devaluation in the Bolivar in recent years. So much so that it has led the South American nation to cling to the US dollar as a unit of account, even as many earn wages in less and less valuable bolivars.

Therefore, the terrible situation that the country is experiencing has led to money losing value at great speed and, therefore, when the government received the payment of taxes, these had already been diluted.

However, as we mentioned earlier, taxes cannot be collected in foreign currency. So what is the solution?

Using the petro as a unit of account is a possible escape route. Let us remember that the petro is linked to a basket of basic products that, as we well know, are valued in dollars.

In this sense, by using the petro as a unit of account, the government would be indirectly receiving dollars. Thus, they anchor the payment of taxes to a certain number of petros and, when received, they have not been diluted by inflation.



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