[Economics] Tax on transactions in dollars: what impact will it have on the economy of Venezuela?

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The reform to the Tax Law on Large Financial Transactions, approved on Thursday, February 3 in the second discussion by the National Assembly of 2020, will have a negative impact not only for companies, but also for individuals. The rule, which has not yet been published in the Official Gazette, establishes the collection of taxes of up to 20% on transactions with dollars and cryptocurrencies other than the petro. “It affects everyone, companies and individuals, because it simply makes the cost of transactions more expensive,” economist José Guerra, a member of the Venezuelan Finance Observatory, told El Nacional.

 

The regulation would mean a setback in dollarization and would even conspire against it, said Guerra, also a deputy to the National Assembly elected in 2015. He added that all commercial activities of purchase and sale will become more expensive, and clarified that there is no exemption: everyone must pay tax on those transactions. “This tax, when paid, cannot be deducted from income tax as is the case with value added tax. The common citizen is equally affected because when he goes to make a purchase in dollars, of any product, he has to pay the tax whose rate is not known,” said Guerra. The parliamentarian also indicated that companies that have employees paid in the US currency will also be subject to the collection of the tax. This is a cascade effect that will affect all commercial activities in the country.

 

https://www.elnacional.com/economia/impuesto-a-las-transacciones-en-dolares-que-impacto-tendra-en-la-economia-de-venezuela/