Monday 28 November 2022

Treasury threatens to close doors to Sinpe Móvil to avoid tax evasion

Merchants defend that collection data show that payment method "is not the bad guy in the movie"

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26 November 2022 - At The Banks - BCCR

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QCOSTARICA – What had been a good tool as a payment mechanism for sellers and businesses, the Ministry of Finance (Treasury) has in its sights the Sinpe Móvil service, warning that it could be used to evade the payment of taxes.

“In Sinpe, transactions that would pay VAT outside Sinpe must pay VAT. It is the obligation of the Ministry of Finance to combat tax evasion,” Ministry of Finance

“Sinpe Móvil is becoming a problem for us from the point of view of (tax) evasion; it one of those things that are born with goodwill, it was intended to facilitate transactions, but now it is an evasion mechanism, to deposit me and there is no invoice”, considered Elián Villegas, Minister of Finance, in a recent event of the College of Economic Sciences.

The special attention paid by the Treasury to Sinpe responds to the gradual increase in transactions that has been taking place through that platform, which derive from the facility enabled by some financial entities to allow payments of more than ¢200,000 colones per day.

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For example, only in 2020, 55 million transactions were carried out on this platform, moving one trillion colones.

Read more: Will that be Cash or Sinpe Móvil?

However, merchants refute the assertion that this platform encourages tax evasion, since they consider that, if so, the collection would show a fall and rather in recent months the opposite is reflected, according to Alonso Elizondo, executive director of the Chamber of Commerce.

Along these lines, between March 2018 and March 2021, the number of transactions through Sinpe Móvil showed a significant rebound and, at the same time, the amount that the Treasury received for the sales tax also grew by 31%.

The truth of the case is that the tax authority is trying to find mechanisms to guarantee that money movements through this platform pay the corresponding taxes.

Clarifying that, yes, the issue lies in the purchases of goods and services taxed, not the simple movements of money between accounts.

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“In Sinpe, transactions that would pay VAT outside Sinpe must pay VAT. It is the obligation of the Ministry of Finance to combat tax evasion,” reported the Treasury.

That is to say, it is not that it is intended to collect VAT or any other tax on money movements between own accounts, remittances in favor of family or friends or remittances where there is no transaction for the purchase and sale of goods or services.

What to do?

“The simplest thing is to force merchants to make a report of their sales according to the means of payment used and cross that with the data of the Central Bank, as well as a campaign to educate that requesting an electronic invoice is mandatory,” said Gerardo Corrales, economist at Economía Hoy.

 

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