Tax agency to resume credit card bites

A court has allowed the tax agency to resume collecting 2 percent of credit card transactions that pass through local banks.

The Tribunal Contencioso Administrativo lifted the freeze it had imposed in November, according to the Ministerio de Hacienda, which said it would begin collecting the money immediately.

The ministry said that the 2 percent would be applied to income taxes. Just about any use of credit cards is subject to the bite. The amount actually is closer to 1.78 percent of any transaction that is covered by sales tax because the ministry has agreed to not take a bite of sales tax.

Consumers will not see anything different when they pay with a credit card. The deductions take place at the bank level.

Commercial groups have protested loudly, which is why the ministry found itself in court. Most businesses already have to report their income periodically and make advanced payments on income tax.

The ministry said what officials call a retention will not involve those businesses that are on a simplified sales tax plan. That includes a lot of bars who pay taxes when they purchase their products. The retention also will not be made for payments for public transportation or of those taxpayers who do not have to report periodically.

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