Several news reports have emerged recently that Venezuela will start accepting cryptocurrencies in tax payments for its citizens.

While according to to source There is a real, hidden reason other than what was announced and related to fighting inflation and reducing the use of the dollar.

The Bolivarian Council of Mayors earlier this week signed a document known as the National Agreement on Municipal Tax Harmonization.

This legal tool seeks to improve Venezuela’s tax system, and the state-backed Venezuelan cryptocurrency “petro” is one of the tools the government seeks to use to collect taxes.

But in Venezuela, the use of the petro is not the same as the acceptance of the petro meaning, according to the document approved by the mayors, the use of the petro currency as a unit of account used to calculate fines, fees or taxes within the state.

Read:An unconfirmed tweet storms the crypto market and makes it fall by more than 290 billion dollars

But there is no official statement acknowledging, or even suggesting, that municipalities will accept national cryptocurrency as a method of payment.

In fact, this decision may have more to do with the government’s love of the dollar than the petro itself.

In the sense that the government announced the acceptance of the encrypted digital petro currency in the payment process in the calculation method only, but on the ground, the bolivar cash currency is dealt with and according to its assessment in dollars.

Venezuela suffers from rampant inflation and a seemingly endless devaluation of its cash, the bolivar.

As a result, the dollar is king in Venezuela, even if it is increasingly difficult to obtain foreign currency within the country.

But the superiority of the dollar in Venezuela is clear, because goods and services are often priced exclusively in dollars, and only the wages of Venezuelans, which are calculated in worthless bolivars as a result of the rising inflation, remain.

This makes daily life, and dealing with daily expenses such as food and shelter, very difficult for the residents of the oil-rich country.

As we have indicated, most things are valued in dollars, so it is impossible to do so for anti-dollar state taxes.

Read:Brazil arrests gang laundering money with Bitcoin and cryptocurrency

But the government cunningly resorted to evaluating taxes in the petro currency, which is also valued in dollars, and accordingly, given that the petro currency is a cryptocurrency linked to a basket of goods valued in dollars, which means that the petro is allowed to be accepted by the government to receive dollars indirectly.

As the government does not want the petro as much as it wants to use it only in the process of calculating taxes.

Which means for Venezuelan taxpayers that their taxes will be assessed in petro, for example:

If a Venezuelan had a tax obligation of 809457 bolivars (or $10) on January 1, 2020 and waited until today to pay it, that would result in less than $3 net taxes for the state due to inflation.

Read:Shares of cryptocurrency exchange Coinbase face extreme volatility after the “Super Bowl” announcements

But now, if the same person’s tax liability for a Venezuelan is 0.5 petro (which, on average, is $30), that means that the country will be required to pay $30 today, tomorrow or next year, regardless of the depreciation of the bolivar.

José Alejandro Terran, Mayor of Vargas, told VTV:

The signed agreement makes it clear that mayors have a comprehensive economic vision for Venezuela.

The document allowed us to separate ourselves from the local vision and to understand the economy at the global level.

Read also:

Venezuela Finishes Testing Using Bitcoin as an Option to Pay Fee for Official Documents

Bitcoin accepted by 20,000 retailers in Venezuela…details here