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

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

Expanding the adoption of 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 will be able to pay taxes and fines using the State’s cryptomoney.

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

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

In addition, Delcy Rodriguez will have to create a system of information exchange and monitoring of companies in order to track payments made.

„This tax harmonization agreement, which we achieved after a great debate among the 305 Bolivarian mayors, is an unprecedented event in our country,“ said Mayor Erika Farias.

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

Are 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 oppose the Nicolás Maduro regime.

In the case of those 30 municipalities, they will Bitcoin System continue to collect taxes in the national currency that is the Bolivar. This is important given that, as Rodríguez pointed out, the prohibition to collect taxes and tariffs in foreign currency was established.

The reason why these 30 municipalities are not joining the agreement is because of the lack of technological infrastructure to process payments in Petro.

A strategy

The news should be taken with caution. Without a context of the country’s situation, we might think that this is good news for the crypto market and that Venezuela is the nation of crypts, 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 U.S. dollar as a unit of account, even though many are receiving salaries in increasingly less valuable bolivars.

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

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

Using petroleum as a unit of account is a possible way out. Let us remember that oil is linked to a basket of commodities that, as we well know, are valued in dollars.

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