Finance ministry battling its own public image in new sales tax campaign

hacienda021115The finance ministry once again is seeking the help of citizens to turn in tax cheats.

The problem is compounded because in many cases, the citizens themselves are tax cheats who are benefiting from a merchant’s off-the-book transaction.

This year the finance ministry has an even greater public relations problem. The news has been filed with reports of golden pensions for insiders as well as pork barrel budgets. It was the finance ministry after all that created a national budget 19 percent bigger than the last year, a shock to many citizens who have not seen their own income go up that much.

And the finance minister and first vice president, Helio Fallas, is not exactly a matinee idol. He is expected to present bills for even more taxes to the legislature soon.

A poster for the current campaign seems to carry a mixed message. At first, it is hearts and flowers celebrating the month of love and friendship. But then the tone changes dramatically as it tells shoppers to file complaints if they do not receive an official invoice, a factura.

This has been a continual effort by the ministry, which said that 457 such complaints were received last year.

The off-the-book deals can be found everywhere, from the smallest restaurant to the big furniture outlets. A clerk may simply ask if a shopper needs an invoice. If so, they will apply the 13 percent sales tax.

There is a new wrinkle this year, The ministry is again urging shoppers to use credit cards so the sales can be tracked easily. But now the credit card processors are under orders to remit up to 2 percent of every deal to the ministry as an advance payment of income tax. And some merchants are tacking 2 percent on the final price of items to compensate for this bite by the ministry.

The mathematics suggests that many shoppers will pay in cash, accept an unofficial receipt and save the sales tax while the merchant saves 2 percent in retained earnings.

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