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Venezuela to Allow Tax Payments in Petro Crypto to Bypass U.S. Sanction

Venezuela, to establish much-hyped PETRO sovereignty is going to accept the tax payments in cryptocurrency.  

The recent update by the Venezuelan government shows that a “National Tax Harmonization Agreement” has been made and signed. Under the agreement, Petro (Venezuela’s cryptocurrency) has got the sanction as a unit of account for payment of taxes.

Reportedly, the mayors of the country also supporting President Nicolas Maduro’s government plans for Petro expansion and to multiply the reach of Petro in the country to dodge U.S. sanctions while battling cutthroat inflation. The mayors showed a willingness, commitment, discipline, and adherence to the national development plan.

According to Maduro, the action is to favor the economy and development and to achieve the necessary income for the action of the municipalities in the states. 

The agreement says-

“Under the Venezuelan legal system, the collection of taxes in foreign currency is prohibited and the use of the sovereign cryptoactive El Petro is approved, as a unit of account for the dynamic calculation of taxes and sanctions.”

The National Harmonization Deal Faces Opposition  

On Aug 10, 2020, The National Tax Harmonization Agreement is signed by the Bolivarian Council of Bolivarian Mayors and Mayors and approved for 305 municipalities of Venezuela to deploy El Petro for tax payment.

However, some municipalities aren’t in favor of this move and denied supporting the Maduro government action plan. Reportedly, the opposing municipal governments will remain following the usual practice to collect taxes in Bolívar. Also, many municipalities are lacking suitable technology to process Petro crypto payments.

The Venezuelan Politician, Erika Farías has signed the agreement on behalf of the Council of Bolivarian Mayors Municipal Palace of Caracas. Farías was supported by several spokespersons including few other mayors like the mayors of Maracaibo, Willy Casanova; from Barcelona, ​​Luis José Marcano, and the mayor of Vargas, José Alejandro Teran. The detailing mentioned in the update.

Delcy Eloína Rodríguez Gómez, Venezuelan politician and the Executive Vice President of Venezuela will be responsible to maintain the standards of the treaty while avoiding double-spending in taxation. 

According to Gómez, in a single registry, the details of all the municipal taxpayers will be

maintained that will “function as a digital tool for consultation, information exchange and monitoring of companies with branches in different municipalities, to verify any declaration presented in one mayor’s office as declared and paid in another, and to avoid double taxation of the industrial sector.” Later, this instrument can be deployed for “crossing information with the national tax system. This unique registry will be created and administered by the Bolivarian Council of Mayors and Mayors.”

Gómez said this is an unprecedented event(the tax harmonization agreement) for the country which “made it possible to simplify the parameters of the economic activities of industries, businesses, and similar types, reducing from 600 to 30 parameters.”

Benefits of Petro By Venezuelan Politicians

Some of the benefits of Petro also highlighted in the update. Like, Petro can protect the collection of municipal taxes. There is also a possibility to consolidate digital data of municipal taxpayers which can further strengthen the national data of taxpayers and can provide the stability to inter-municipal information systems in tax matters. Likewise, Petro can provide aid to governments to calculate fees and fines.