Venezuela could soon start collecting taxes in its oil-backed cryptocurrency the Petro (PTR), as the Bolivarian Council of Mayors has signed the so-called “National Tax Harmonization Agreement.”
The agreement applies to 305 municipalities in the country and specifies that tax and sanctions payments may be collected in the oil-backed cryptocurrency. Since it was launched, the cryptocurrency has been gaining users because of the government’s campaign to give it new use cases.
An announcement from the Venezuelan government details the country’s vice president, Delcy Rodríguez, will be in charge of implementing a taxpayer registry through a digital consultation tool, and of creating an information exchange and monitoring system for companies to record payments in Petros.
Commenting on the move, Rodríguez was quoted as saying:
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
Venezuela has a total of 335 municipalities, but only the 305 under the mandate of the United Socialist Party of Venezuela (PSUV) are in favor of the new tax collection mechanism, as the others choose to keep collecting tax in the country’s fiat currency, the Bolivar, over a lack of infrastructure to process PTR payments.
The move comes as Venezuela is going through economic distress caused by hyperinflation. Bloomberg’s Café Con Leche Index shows that the country’s annual inflation rate is of 3,122%, even after the country devalued its current by 95%.
The Venezuelan government’s push to get people to adopt the oil-backed cryptocurrency has seen it accept passport payments in it, among other things. The government announced earlier this year that 15% of all fuel payments at petrol stations in Venezuela were made using Petros, and claimed 40% of all Petro transactions were made at foreign petrol stations.
The Petro is a controversial cryptoasset that local Venezuelan merchants have called a scam. The head of the country’s cryptocurrency initiative, Joselit Ramirez Camacho, has seen the U.S. Immigration and Customers Enforcement (ICE) add him to its Most Wanted List, accusing him of violations related to drug trafficking.
Featured image via Pixabay.
