Columbia plans to restrict tax evasion by introducing a new digital currency. Recently, the Columbian government announced that they would be launching their digital currency in the near future. It would help them to reduce tax evasion and improve the traceability of the payments made by their citizens. The Columbian Government is also looking to put restrictions on cash payments and transactions over 2400$ USD, i.e., 10 million Colombian pesos, to reduce the use of cash as the primary payment method.
Columbia’s New Digital Asset
You can find that most countries now prefer to digitize a good part of their economy to understand the control of the flow of money within their country. Reyes, Columbian Tax Authority head, clarified that the government is looking to create its digital currency for payment.
He also told local news that this thing would be one of the several proposals of Columbia’s newly elected President, Petro, to reduce tax evasion, estimated at around 6% to 8%. Reyes also clarified that their digital asset’s primary purpose would be to improve the traceability of any payment made by merchants so that they cannot avoid taxes using cash as their payment method.
However, during this conversation, Reyes did not say anything about the crypto asset, such as when it could be released or how it would work with the old payment methods in Columbia.
Cash Restriction
Many measures or restrictions will accompany the introduction of a new digital currency. One of the necessary measures would be a huge restriction on cash payments over a certain amount. DINA’s head, Reyes, confirmed that this amount will be 2400USD.
However, curbing cash payments will destroy the country’s payment channel and create chaos. While the use of cash as a primary payment method got reduced in the last few years, cash is still one of the essential methods of payment in Colombia. According to various reports, numerous Columbians still prefer to use cash as their primary payment method while paying bills for transportation, cell phone top-ups, and rent. It makes it difficult for the government to bring such restrictions, and it will be fancy to see what the government does to deal with the issue.
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Also Read: Banks are pushed to avoid giving services to crypto exchanges in the US.
