Southern American country, Venezuela, in a newly signed tax agreement is set to begin collecting Taxes, sanctions in Petro, the country’s indigenous cryptocurrency.

The country’s council of Mayors signed this tax agreement to improve the adoption of the country’s indigenous cryptocurrency.

The Bolivarian Council of Mayors signed the tax agreement (National Tax Harmonization Agreement) in 305 municipalities across Venezuela. The new agreement enables the country government to collect taxes and sanctions in Petro.

-Advertisement-

In a statement released by the Venezuelan government Decly Rodriguez, the country’s vice president, would be responsible for the implementation of a single registry of taxpayers through a digital consultation tool.

Rodriguez would also be responsible for creating an information exchange and monitoring system for firms to record payment in Petro.

The vice president in her comment explained that it could only have been possible with the effort of the mayors who met with the economic team and reached the agreement.

Improving Petro adoption in Venezuela

Since the launch of Petro in 2018, the crypto has struggled to take flight. The government, however, keeps doing all in its power to make it possible.

President Nicolas Maduro’s government has continued to device different strategies to improve Petro’s adoption. However, Venezuelans prefer to use other mainstream cryptos like Bitcoin, Ethereum, and XRP for their day to day transactions.

Trading of gold and Oil in Venezuela, funding of government projects, payment of bonuses to civil servants by the government have all been done using Petro towards improving its adoption.

In June, the government mandated the use of Petro crypto as a payment option for gasoline in the country. The government had plans to sell gas to residents at a reduced price in exchange for the Petro crypto. Primarily the aim was for it to act as a catalyst to boost the adoption of the oil-backed digital currency.

The new agreement signed by the mayors, however, has made it illegal for Venezuelans to pay tax in foreign currencies.

Advantages, controversies around Venezuela’s Oil-backed Petro

Vargas Mayor, Jose Alejandro Teran mentioned certain benefits the country would enjoy from this new agreement. He highlighted that a collective digital resource for municipal taxpayers would help Venezuela improve the taxpaying process and give stability to inter-municipal informational systems.

He said further that with Petro as a medium for collecting fines and fees, it is an innovative element that could help protect the country from induced hyperinflation.

On the other hand, Petro, since its launch, has been a controversial cryptocurrency with a sluggish start. The digital currency since 2018 has struggled to compete with Bitcoin.

Recently, the US compounded to the woes of Petro. American authorities included the person behind the cryptocurrency to its list of most-wanted fugitives. They also offered a bounty of $5 million for anyone who has information that can lead to his arrest.