We’ll head Down The Rabbit Hole in a few but first…Remember when we told you about Maduro’s new foreign currency/cryptocurrency (except ‘el Petro’) tax (IGTF) and how it could potentially have an effect on the fragile economic rebound in Venezuela? Well, it didn’t take long. The new tax can be anywhere from 2% – 20% depending on the transaction. It’s important to note that unlike in the free world, all point of sale machines (formerly called cash registers) are connected to a government system so they can collect the tax (and monitor) on each sale. That means that aside from the fact that a tax on foreign currency usage might dampen the use of dollars for purchases, currently well over 50% of transactions, the implementation of the tax would be an important part of the equation.

 In typical Chavista fashion, they have taken something that should be relatively straight forward and made it complex.  Instead of something like “OK, effective (insert date here) there will be a 10% tax on all foreign currency transactions. We have made the appropriate adjustments to our system so just download the software and you’ll be all set.” We have…well…a cluster….

 Most businesses neither know how to process collecting the new tax nor how to comply. Consecomercio reports that 75% of businesses are not able to receive payment in foreign currency, most notably, dollars. Many machines are not adaptable to the new configuration and need to be replaced, at the business owner’s expense of course. The cost for this is anywhere from $600 – $1,000 or more which is a significant amount in Venezuela. (They didn’t say if that transaction was subject to the new tax) Well, couldn’t you just do it manually if you don’t have the money for a new machine? Maybe you could if you knew exactly what the percentage was on each transaction but, at this point it’s unclear. You also don’t want to run the risk of some government official paying you a visit and having to pay them off or get shut down.

 The IGTF has various rates for various transaction types and products and then there’s the statement in the declaration, “the government may establish a different amount.” The situation is further complicated by the shortage of bolivars (local currency) ever since Maduro lopped 6 zeros from the currency in October. People accustomed to using dollars now have to switch back to bolivars if they want to avoid the tax (penalty) but many can’t get them and if they can they may not be able to get enough of them due to government regulations and restrictions on cash withdrawals at banks. (It’s a daily ration kinda’ deal) So, people don’t want to pay in dollars and businesses are reluctant to accept dollars even if they did and they don’t have access to bolivars. Both businesses and consumers say “It’s rather confusing.” What a cluster….

 Note : At least it’s not as bad as when they last reconfigured the bolivar (Maduro lopped off 5 zeros in that one). They government issued an edict that all 100 bolivar notes would be discontinued as of…not in six months…or six weeks… but like… Friday. Anyone wanting credit in new bolivars for their old 100 bolivar notes (80% of circulation at the time) had to turn them in at their local bank or if you didn’t have a bank account you could turn them in at a government bank and get an IOU from the Chavistas. The country was paralyzed for about a week as people waited in line at the bank with boxes and backpacks full of 100 bolivar notes. (the currency had become so devalued merchants were weighing bolivars instead of counting them) Then the government realized that the new bolivar notes weren’t sufficient for making change so they rescinded the “turn in your 100 bolivar notes” edict and everyone had to go get their 100 bolivar notes back…if the bank hadn’t already turned them in to the government, which most did. 21st Century Bolivarian Socialism…Viva La Revolucion!

 Enough of that…We have Caracas Chronicles telling us that Venezuela and North Korea have agreed to increase sports cooperation to support training of athletes. Dictators can be so uplifting.

 Then we have Maduro’s National Assembly approving a reform of the law against corruption. The president of the assembly says “to be upheld with rigurosity, (my spell check had issues with that one) and strength…to protect assets.” (Just like they enforce the laws they have now?)

 And we have electrical experts at NGO Activos por la Luz telling us that Guri (responsible for 80% of Venezuela’s electric power) is currently operating at 50% of capacity. (They still haven’t recovered from the major week-long blackout (s) of 2019 and perhaps never will.)

 And we have the president of INAC (aviation authority) announcing that Conviasa (government-owned airline) will add new routes to Argentina,Chile, Ecuador, Peru, and Spain. They didn’t,however, say when…?

 Let’s head Down The Rabbit Hole….

 In 2017 the FAES was created to (of course) protect the people. Nothing could be further from the truth. While the DGCIM and SEBIN were widely known for “disappearing” people and their operations cloaked in secrecy FAES is widely known for killing people and there is nothing secret about it. People are routinely killed in their living rooms in front of their family or dragged outside to be shot where the neighbors can see.They are masked,dressed in black, and carry long guns and when they come they’re not coming to arrest anyone. Occasionally you may see one of them in uniform and without a mask but that’s usually in the daytime. It’s not even clear who’s in the chain of command. They are affiliated with the PNB, the national police, but that’s really all anyone knows about them and it seems nobody really wants to ask… would you?

 While DGCIM and SEBIN may be a notch below FAES on the lethality scale they are no less terrifying. Captain Acosta was in the hands of DGCIM and Fernando Alban was detained by SEBIN. While they weren’t dragged out into the street and shot, FAES style, they are no less dead.Both groups, for the most part, operate with impunity and have come under fire for Human Rights violations. In March,2019 DGCIM had 15 members denounced by the OAS (Organization of American States), along with 3 prosecutors and 2 MPs (assembly members). It is frequently reported by attorneys that they have been able to secure release orders for clients only to be frustrated by SEBIN. SEBIN is under direct control of the Vice President of the country so it is their stance that, when they choose to, they can disregard court orders and will only recognize orders from the office of the VP. It happens all the time and with no independent judiciary there is no recourse.

 Oh, and don’t think you’re safe just because you’re Chavista. Party affiliation won’t protect you if you don’t tow the party line. In February,2015 Alcedo Mora disappeared. The day before he “went missing” he sent a text that SEBIN was following him as he attempted to investigate corruption at state oil company PDVSA … and he was Chavista! At the same time, two brothers involved in community organizing with Mora also “went missing”. In another example, Ricardo Moreno, Venezuela Foreign Ministry North American Director, was grabbed by SEBIN and held for 12 days with various explanations offered including treason and trafficking of influences. Is there a pattern forming here …multiple explanations/allegations without proof ? When Moreno was released after 12 days nothing more was said by either party. It was like it never happened. Speculation was that next time he would simply disappear.

 More tomorrow….