After Bitcoin Craze Venezuelans to Face up to 20% Crypto Tax

Hyperinflation and the national currency crisis in Venezuela had given rise to a wave of Bitcoin craze among the nationals. To curb the downfall of its national currency and address the growing interest around cryptocurrencies, on February 7, the Venezuelan government approved a new tax bill aiming to collect up to 20% in taxes from crypto transactions. 

Targeting Crypto and Foreign Payments

According to local reports, the Venezuelan National Assembly held the second discussion session for a new draft bill targeting taxes on ‘large financial transactions’ in cryptocurrencies like Bitcoin (BTC).

The draft was filed on January 20 this year and aims to collect 2% to 20% on transactions in any form of currencies other than those issued by the Republic Bolivarian Republic of Venezuela, or the Venezuelan bolivar as well as the country’s oil-backed cryptocurrency, El Petro. 

Reportedly, a week ago, the Venezuelan government finally approved the draft bill requiring local firms and individuals to pay upto 20% for operations carried out in cryptocurrencies as well as foreign currencies like the US dollar. 

Reviving the Venezuelan Bolivar

The new tax regime is another one of the nation’s initiatives to incentivize the use of the national currency. Venezuela’s national currency lost over 70% in value in just the last year while it has lost nearly all its value over the past decade.

The bill further noted: 

“It is necessary to guarantee treatment at least equal to, or more favorable, to payments and transactions made in the national currency or in cryptocurrencies or crypto assets issued by the Bolivarian Republic of Venezuela versus payments made in foreign currency.” 

Many local and international publications had highlighted a rising Bitcoin adoption in Venezuela over the last few years. In fact, thousands of local vendors and businesses had started moving into cryptocurrency to survive the challenges of hyperinflation and currency devaluation in the nation. 

Over the last year, BTC gained decent traction in Latin America after El Salvador adopted BTC as legal tender. Further, amid inflation rise, the digital currency grew decent social interest in Argentina too. 

More recently, the Indian government had come up with a new tax regime targeting cryptos in the nation.