- Petro or Petromoneda is a cryptocurrency is backed by oil and mining reserves and was aimed at aiding the downfall of the Venezuelan fiat currency
- The use of El Petro for paying taxes is expected to safeguard the Venezuelan public from what they call ‘distorted prices’
- The Vice President also informed that the tax harmonization agreement has enabled them to reduce the economic parameters involved in industries and businesses from 600 to 30
Recently, the Bolivarian Council of Bolivarian Mayors and Mayors have officially signed the National Tax Harmonization Agreement. According to the agreement, the use of foreign currency as a means of payment for tax is prohibited by the Venezuelan Legal System. However, the sovereign crypto asset, El Petro can be used to pay the taxes as well as sanctions.
Use of Petro To Protect Citizens From ‘Distorted Prices’
Petro or Petromoneda is a cryptocurrency that was launched by the Venezuelan government back in 2018. The crypto is backed by oil and mining reserves and was aimed at aiding the downfall of the Venezuelan fiat currency. Moreover, the use of El Petro for paying taxes is expected to safeguard the Venezuelan public from what they call ‘distorted prices’. The initiative of implementing cryptocurrency in government procedures hints towards the wider adoption of crypto assets. The official signature of the agreement means that all the 305 Bolivarian mayors have expressed their agreement and compliance towards the agreement and to strictly adhere to the terms.
Vice President In Charge Of Supervising Tax Systems
The Vice President of Venezuela, Delcy Rodríguez is put in charge of supervising and looking over the tax systems in order to avoid any shortcomings. Delcy also announced that a single registry for all the taxpayers would be maintained using a digital consultation gizmo. She also declared that she will be the head of a project, where they will be creating an information and monitoring directory system for various companies to keep track of tax payments. Delcy calls the agreement, a historic achievement. This is because for the first time in history the country had finally achieved the municipal tax harmonization.
Innovative Use of Cryptocurrency To Solve The Prevailing Issue of Inflation
The Vice President also informed that the tax harmonization agreement has enabled them to reduce the economic parameters involved in industries and businesses from 600 to 30. One of the Venezuelan Mayors, José Alejandro Teran said that not only using cryptocurrency as a means of calculating taxes is innovative, but also it helps to solve the major issue of inflation. Further, the use of Petro to collect fines and rates will aid the worldwide economic crisis due to the ongoing coronavirus pandemic.
The Venezuelan government has partnered with Russia based Rosfinmonitoring to monitor and track all the cryptocurrency transactions.