Report: Colombia set to counter tax evasion by its citizens with its national digital currency

Report Colombia set to counter tax evasion by its citizens with its national digital currency

The head of Colombia’s tax and customs agency points to the benefits the introduction of CBDC could bring to the country. According to him, official GDP growth could be up to 8% higher. 

Gustavo Petro on the side of CBDC?

The head of Colombia’s National Tax and Customs Authority, Luis Carlos Reyes, said in an official statement that the country will soon follow the path of introducing a national digital currency. A big proponent of the idea is expected to be the country’s newly inaugurated president, Gustavo Petro. One of the main goals of the project is to prevent illegal financial activity. The problem facing officials there includes tax evasion by citizens. According to all reports, this precedent accounts for 6% to as much as 8% of the gross domestic product generated.

Reyes, in an interview with Semana magazine, pointed out that the introduction of a digital currency could be a great benefit to every user. Quoting:

“The creation of a digital currency would make these transactions easier for the consumer.”

Details of these facilities, however, were not provided. 

CBDC considered for a long time

Although it is not entirely clear whether the Colombian government plans to introduce a digital currency as a CBDC or a solution similar to the one adopted in Venezuela, experts agree. In their view, the central bank’s digital currency is what is getting the attention of officials. The technical deputy governor at Colombia’s central bank, Hernando Vargas, is said to confirm this hypothesis. He has already considered the implication of retail CBDC in the year currently underway. In doing so, he compared citizens’ preferred payment method, cash, with cryptocurrencies and stablecoins:

“The line of defense against the widespread use of cryptocurrencies and stablecoins is weaker in Colombia than in other jurisdictions, and the discussion of adopting retail CBDC is becoming particularly interesting.”

A president who follows the market

News of the potential introduction of a national digital currency coincides with the swearing-in of President Petro. He is widely known for expressing his support for the cryptocurrency segment. In 2017, he became famous for saying that bitcoin has the power to remove power from the government and put it in the hands of the people. In doing so, he pointed out that the virtual currency is “pure information and therefore energy.”

The latest data shows that Colombia’s economy, despite its problems, is doing very well. It recorded a 12.6% impulse in the second quarter, while economists had expected growth of 12.1%.

Disclaimer: Blockbulletin does not take accountability of investments based on the information of the website. We highly advice readers to make extensive research prior to any invest

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