Should Venezuelan companies accept Bitcoin?
Confusion and chaos come up every time Venezuelans are consulted about the so-called tax on large financial transactions (IGTF) or tax on payments with foreign currencies and cryptocurrencies, such as bitcoin (BTC). The new tax began to be levied this week. However, in a tour of several businesses and retail chains operating in the country, it was found that, for the most part, those consulted are not charging the 3% that must be applied to payments in foreign currencies and cryptocurrencies.
In theory, the new tax was to be applied last Monday, March 28. However, those consulted stated that they are not clear how or to whom to apply it. Today, in supermarket chains, people are paying with dollars in cash, while in an electronics store, a customer uses bitcoin to deliver a new smartphone. None of them were told about the IGTF.
The employees of these establishments ensure that they have received information about the tax on payments with foreign currencies and cryptocurrencies. Still, their employers have not informed them when they will start charging the 3% established. Some say they need time to adjust their fiscal machines, which require updating the invoicing software, given that it is the mandatory instrument where the amount paid by IGTF must be reflected. In fact, merchants are requesting an extension to the National Integrated Service of Customs and Tax Administration (Senate) to face the difficulties they have in collecting the new tax on payments with foreign currencies. But so far, there has been no official pronouncement. Unofficially, it is said that some particular taxpayers have informed the tax authority of the difficulties faced by their businesses in adapting their computer systems and fiscal machines.
So, once the will to comply with the new regulation has been expressed they will be allowed to make their adjustments and adapt their systems progressively to collect the new tax. Some companies, such as Farmatodo, are already charging the IGTF, as reported by users on social networks. However, the fast-food chain Arturo's announced that it would not receive foreign currency due to confusion regarding tax collection.
"Arturos's de Venezuela informs all its customers and relatives that, due to the uncertainty generated by the application of the new Tax Law on Large Financial Transactions, we are forced to temporarily suspend the receipt of foreign currency," described in the text of a statement published in social networks. Subsequently, the fast-food chain issued a new tab in which it informed that the suspension of payments in foreign currency was maintained while adjusting its systems for the collection of the new tax.
Paying with bitcoin or in bolivars is a common dilemma
Payments with cryptocurrencies, especially bitcoin, are increasingly common in Venezuela. The crypto-asset can not only be used for cross-border transactions, but it is also easily used and is an excellent alternative to solve the shortage of bolivars that has been prevailing in the country for several years. Buying products, services, or food and paying for them with bitcoin is always ideal for those who have cryptocurrencies. Therefore, the community celebrates every time a new establishment adopts bitcoin as a payment method.
However, the IGTF in Venezuela taxes payments with cryptocurrencies other than the petro in businesses, companies, or premises that the Senate has qualified as particular taxpayers. In this sense, every time someone goes to a business or premises and makes payments with bitcoin or other cryptocurrencies will have to pay the 3% rate stipulated by the tax. However, this is only when they do so before the Special Passive Subjects (SPE), the agents designated by the Senate to collect the new tax.
So a person with bitcoin, when making a payment to a particular taxpayer, will have to evaluate whether to do it directly with the cryptocurrency or if, on the contrary, they use one of the exchange platforms available in the country to exchange their BTC for bolivars. Payments with the legal tender in Venezuela are exempt from the new tax, but you can lose up to 5% of the available amount in operation. So, depending on the case, paying directly with BTC may be more beneficial, as one bitcoin user pointed out when he was about to pay in a business. "Bitcoin is going to continue to impose itself as the best payment alternative that exists in the country," said Marlón Hernández, a user who believes that there is nothing to worry about with bitcoin face of the new tax.
I am not going to exchange my BTC for making payments with bolivars thinking that I can save 3% of this new tax because the operation may be more expensive, and I am also confident that the amount that the Government subtracts from me can soon be replaced by the profitability that bitcoin can give us every month. This is something we are used to in Venezuela, and fortunately, we have learned that if, on the one hand, they take it from us, on the other hand, we can recover it.
Marlón Hernández, bitcoin user.
The IGTF is a new blow to everyone's wallet.
The IGTF or tax on foreign currency payments is a new blow to the pockets of ordinary Venezuelans and small and medium-sized traders, says Armando Martínez. He manages a chemical products store in the eastern part of the country. He believes that the 3% tax on foreign currency payments has already been adjusted in a price increase carried out by the commercial chain from the moment the new tax was announced. "What happens is that now, we will pay this double tax every time it is our turn to buy every product or pay for services with dollars or bitcoin," he said. Rosalba, a trader who asked not to be identified, categorized the new tax on foreign currency as an "illogical" measure by the Government. From her point of view, the regulation forces small traders to acquire new fiscal machines to collect a tax that will not benefit them at all. As reported by CriptoNoticias recently, financial lawyer Daniel Betancourt said that a tax with the characteristics that this tribute to operations with currencies or cryptocurrencies in Venezuela has is not usually implemented in the countries' tax systems. This is because it is considered an aggressive instrument from an economic point of view. If someone refuses to comply with the withholding or payment of taxes, they may suffer severe consequences.