The Law Against Fiscal Fraud (Ley Contra el Fraude Fiscal) established two years ago, in December 2016, that at the end of 24 months (December 2018) any individual or business that offers services to the public must also accept payment in plastic.
The El Financiero reports that despite in a few months begins the obligation to accept payments by credit or debit card, as well as any other electronic mechanism, in addition to cash, businesses seem to be far from complying with the measure.
The change will affect any business for profit, either on physical or legal, that only accepts payment in cash.
This means that pulperias (corner grocery stores), hotels, restaurants, that often prefer doing business in cash, must obtain a card processing account and the respective equipment to process cashless payment.
The law dictates is that in order for a means of payment to be considered as an alternative to cash, there must be a financial institution in between the business and the consumer, allowing the Ministry of Finance (Ministerio de Hacienda) more control over the transactions.
“Electronic payment has proven its effectiveness to achieve traceability and reduce tax fraud and it was for that reason that compulsory acceptance of payment by credit or debit card was made,” said Maria Isabel Cortés, Executive Director of the Banking Association Costa Rican (ABC).
At the same time, the financial system would have the opportunity to monopolize a larger portion of businesses that are not currently part of its clientele and expand its positioning through banking correspondents (such as Tucán or RapiBAC, through which the bank offers some of its business services).
And the fee, a percentage that can be from small amount to 7% or greater, charged to merchants on each transaction.
Small businesses such as pulperías, kiosks, minisúpers, independent pharmacies, bakeries and small supermarkets agglomerate one of the groups that represent the biggest challenges in this matter.
Only one third (36%) of this group that comprises some 9,600 points of sale accept digital payment (card processors).
According to data from the first census of the Canal Tradicional, developed by Fundes between April and July of 2018, when businesses that do offer card payment they sell on average 27% more than those that do not.
The Fundes says that the non-offer of payment by card goes beyond the intention to evade taxes, and rather more with the merchant’s ignorance of the financial system.
The data reveals that only 44% of the surveyed businesses have bank accounts, this despite the fact that 83% have internet and use digital devices, which shows that the lack of access (to card processing) is not necessarily the limitation.
The challenge is how will the Ministry of Finance regulate or sanction businesses that as of December still do not offer alternative means of payment and even how the consumer can be defended if a business or company allows the consumer the purchase of a good or services only with cash, explained Willy Segura, who until August 14 served as director of the Office of the Financial Consumer (OCF).
The reality is that neither the Ministry of Finance nor the Ministry of Economy, Industry and Trade (MEIC), an entity that was consulted on the impact and application of the measure, is willing to provide answers. The El Financiero said calls to both entities have gone unanswered.
Despite the challenges, realities, and questions about the application of the measure and the sanctions to the businesses that fail to comply with it, the regulation will come into effect in December.
Source: El Financiero
