The Bolivarian Council of Mayors in Venezuela agreed to sign the “National Tax Harmonization Agreement” which incorporates oil-backed petro cryptocurrency as a means to raise taxes and sanctions. The new move has led to broader adoption and use of the state-issued cryptocurrency.
The government has also revealed that the Vice President of Venezuela, Delcy Rodríguez, will oversee the execution of a single taxable person registry through a digital consultation tool. In addition, she will supervise the creation of a data tracking and exchange network for firms to record tax payments through the oil-backed petro cryptocurrency.
Some municipal governments lack means to collect taxes in petro cryptocurrency
Notably, the South American nation has a total of 335 mayors in which more than 90 percent are under the United Socialist Party of Venezuela, led by President Nicolas Maduro. Only 30 mayors are under the opposition regime in Venezuela. The municipal governments led by anti-Maduro mayors are still levying taxes in the Venezuelan domestic currency, Bolivar. Most of these municipalities do not possess the necessary technology to collect taxes in petro cryptocurrency.
Commenting on the new move, the vice president stated:
“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 in the productive and commercial areas, framed in this week of flexibility that began on Monday.”
Maduro still pushing for greater petro adoption
According to sources, Venezuela’s government recently revealed more than 15 percent of all fuel payments; petro cryptocurrency is used to settle at gas stations in the South American nations. The government has introduced subsidies for every person who pays at petrol stations using the state-issued token. In addition, a Ultimas Noticias report suggests that 40 percent of petro transactions went through petrol stations overseas.
Over the past few years, Venezuela has undergone severe inflation that has resulted in economic distress. The government introduced the petro cryptocurrency, backed by oil mined in the country, to counter hyperinflation. Back then, the cryptocurrency market was at its pinnacle, however, the country is facing severe trade sanctions on allegations of corruption within its government. The head of the state-backed crypto was recently listed on the FBI’s most-wanted list.