Taxes and New Economic Measures.
On November 25, 2020, the Vice President of Venezuela announced a set of economic measures that seek to strengthen the national currency, El Bolivar (Bs).
These measures, which I will describe below, have a tax and authoritarian origin, so in my opinion, they have gotten off to a wrong start.
In contrast to the decentralized consensus protocols of Blockchain technology, this centralized measures and restricts personal and collective financial freedoms.
In broad strokes we can summarize these measures in 3 outstanding aspects:
- Extension of limits for bank transactions.
- Appointment of commercial allies who will act as exchange house service providers.
- Creation of a tax on foreign exchange transactions.
Extension of limits for bank transactions.
The Superintendency of the Institutions of the Banking Sector of Venezuela (**Sudeban *) will establish an extension of the limits for transactions with debit cards and electronic transfers, both for natural and legal persons.
Commercial Allies
"Trade allies" of the exchange houses will be enabled with the intention of increasing the number of service providers.
Until now, there are no details of this procedure, but with the signing of new exchange house operators, it is expected that liquidity in foreign currency within the financial apparatus will increase.
Although the term "Commercial Allies" supposes that it will be an elite group very close to the government leaders who will receive this "Fresh Money" and consequently will also receive instructions on the destination of the operations.
Tax on Foreign Currency Transactions.
Foreign currency operations in the bank will have a charge greater than 2% of the transaction amount. In this way, a "transactional tax" is created which will be applied to movements made in foreign currency within financial entities.
This measure will undoubtedly have negative effects on the economy since it would directly increase the prices set in dollars.
Conclusion
What these economic measures seek is to increase the demand for bolívares, and thus try to stabilize the exchange rate, promoting the use of the Bolívar over the use of the dollar by increasing the limits of electronic transactions and at the same time creating taxes on the currency transactions.
But these are inefficient and unconsulted measures since there were no working groups with the private sector. They are simply new measures imposed in an authoritarian way.
Taxes have had minimal efficiency within the Venezuelan tax system. Internal taxation has collapsed
These measures will not give a real fight against exchange speculators but will create a new income to the treasury on a constant basis and, in addition, in hard currency.
@juanmolina
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Hi @juanmolina
One more madness of the government to take advantage of the remittances. They know that there are many of us abroad, and that we send money to Venezuela.
Unfortunately not everyone knows the options of cryptocurrencies to skip that state tax.
The annual amounts for remittances entering the country reach quite high figures.
Estimates for 2020 could be around $ 4.5 billion to $ 6 billion, a product of the diaspora.
I personally think that these measures will not affect at all the crisis that the country is suffering, without a change of government the country will not see a real change in the economy, many countries do not believe in the government and that causes that they do not want to trade with us, no matter how many measures the current government takes I do not see that there can be a real hope for the country.
Yes, there will be changes, but no positive changes.
Greetings friend @juanmolina.
All authoritarian measures achieve a higher level of lack of control, it hurts that the state at this point of extreme crisis, continues to make mistakes from the past.
The measures that must be applied to the population of a nation should not have an authoritarian origin. At least not in a democratic environment.
Good article, what surprises me most about the Venezuelan state is how deconnected to reality they are they only seek to solve their problems at the cost of creating more problems for the citizen
It sounds totally contradictory, but it is reality.
They intend to put out the fire, sprinkling gasoline on it.
As you have said, these are authoritarian and unconsultative measures, they will not have a significant effect on a currency as pulverized as the Bolivar, they just want to have more control over the use of foreign currency, and we already know that more controls only cause more problems.
You have a very clear picture.
You have fully understood the reality and the background of all this.
Hi @juanmolina
Another of the arbitrariness of a totalitarian government, which is desperately seeking money from anywhere without thinking of the Venezuelans.
Hello appreciated friend @janettyanez.
We could never expect any measure on the part of the government, which is really designed with the purpose of providing welfare to the population.
Dear @juanmolina
Finally I managed to find some time to catch up with work and read your publication. Another solid piece, worth checking out (upvote on the way).
I wonder if those officials and tax office have resources and man power, which is necessary for tax system to work properly. I can imagine that most people in Venezuela do not care about taxes at all, since they struggle to survive.
So ... taxes are way that suppose to bring more demand for local currency. Is that what you're saying? It surely in THEORY make sense....
Enjoy your sunday :)
Yours, Piotr
Greetings, dear Piotr.
No, it isn't.
The national administration will apply these taxes to banking transactions carried out in dollars.
So with only one order from "SUDEBAN", the banking entities must make the adjustments to their systems and have the human resources, in order to comply with this new government resolution.
Cheers!