Uncertainty and confusion among merchants and common citizens marked the first week of entry into force of the reform of the Tax Law on Large Financial Transactions (IGTF) in the country.
The official Gazette No. 6,687 Extraordinary, dated February 25, contemplates an aliquot of between 2% and 8% for payments in dollars or cryptocurrencies, made by individuals, legal entities or economic entities, which are made in the national banking system.
The value for the tax on payments made in cash to persons classified as special taxpayers reflects a variation that ranges from 2% to 20%. In addition, an amount of 3% is mentioned for taxpayers who work with this same type of transaction.
The IGTF also affects transactions made through payment platforms such as Paypal, Zelle, Binance and Reserve, among others, in which the use of the US currency predominates. But many merchants claimed to be unaware of this law and others admitted that they did not have the capacity to complete the process of adapting their systems to collect this tax.
«There was never a process of information, disclosure. It is always said: ‘Communicate and publish it,’ but if you don’t communicate it beforehand, you just publicize it and throw it out on the street and that’s it, what’s happening at the moment happens and nobody knows anything, “he commented to The National the owner of a butcher shop-delicatessen in Catia, Libertador municipality of Caracas.
In his opinion, this is an inflationary tax because it does not generate a fiscal debit, with the consumer being one of the most affected within the product’s distribution chain.
“It is not the value added tax. Everyone has to pay 3%. There are products that go through four hands through their distribution process: from the producer to the distributor, from the distributor to the large chains, then to the wholesaler who sells to the wineries and small merchants. All those links will receive the dollar and that tax will be charged to the prices. This is a much more inflationary tax than any other. It’s satanic,” he said.
With a tone of resignation, the businessman pointed out that he will continue to wait for more information so as not to fall into sanctions before the tax entity.
«At our level of winemakers, from a place that has only one point of sale, it is difficult. For us, the administrative costs of being a special taxpayer are cumbersome. Luckily that’s fortnightly. We are eager for you to take it to monthly so that the special taxpayer can organize himself better. Already every 15 is difficult, but we go little by little ».
The manager of a mirror store in the same area is also full of uncertainty. “We still have no knowledge of that law itself; most people pay in cash or debit, so we don’t have how to apply it right now.
He expressed that he did not know if they should add the tax percentage to the invoice or should include it in the final value of the product. He added that since March 28, the date on which the IGTF was activated, they have not applied it to their sales. “Our prices are already established with the previous tax. So, I can’t tell the person that now we are going to charge him 3% more, I can’t », he said.
«We are still waiting for the new fiscal machine; then they must update the software. We had to make a $1,200 investment in that because the old machine doesn’t quite reach the configuration. This is an extra expense. It is not something that affects the consumer, but it does affect the companies that must make this expense. Apparently we must declare it every 15 days, “said the woman, ignoring that the period to make the official declaration as a business on the new IGTF began this Monday, April 4.
In the center of Caracas the situation is similar. Traders revealed their insecurity regarding the interpretation of this rule and fear that this will translate into consequences for them.
“It is a mess, there is a lot of confusion. I think that the Seniat should extend the validity of the entire providence… We don’t even have a way to change the fiscal machine. We are waiting for the sanction and now. There is no other, “said the manager of a shoe store in El Silencio.
The owner of a fabric and pillow store also expressed ignorance of the content of the regulations and condemned that the Seniat has not reported on the issue days before it comes into force.
The manager of another shoe store was calm because so far they are not special taxpayers. “If clients have come asking if we are charging the 3% tax, if we have a tax invoice, but since we are ordinary taxpayers, it does not apply.”
“We wanted to wait to see if they released other information, but for now everything is fine. Luckily we have not had to modify the fiscal machine because we bought it before this tax came into effect. We must still be alert to see if they change the law or declare us special taxpayers », he pointed out.
There are merchants who are indifferent to the situation. The owner of a store selling washing machines expressed, very calmly, that he was unaware of this tax law. The same thing happened with the manager of a baby clothing store. “I don’t know anything regarding it. My boss has not told me anything », he said in a disinterested tone.
This scenario is repeated in Palo Verde and Petare. The merchants claimed to be totally uninformed on the subject.
“We pay taxes, but we know nothing regarding that tax on the dollar. We are waiting for a meeting with the accountant so that she can explain to us,” said the person in charge of an auto parts store.
He assured that people continue to pay in dollars in cash, bolivars and Zelle. “Our prices are anchored to the BCV dollar. We really do not know if that law has already entered into force or not.
The manager of a delicatessen is in the same situation: «I don’t know anything. I haven’t read the law, I don’t know anything regarding it. People haven’t asked us regarding that either. They buy and that’s it.
another landscape
However, the reality in Chacao and Las Mercedes is totally different. The vast majority of businesses, classified as special taxpayers, have managed to adapt and charge the 3% tax to their customers. However, some assured that sales dropped drastically from the second week of March.
“We made the pertinent changes legally and they have had a great impact on sales. In one week we have only sold two mattresses,” said Jesús Ponce, manager of a mattress store on Élice de Chacao street.
Despite the situation, he pointed out that they will continue to work. “I don’t think this law affects prices, but it does affect sales because people are afraid.”
“We have already made the changes in the fiscal machine, but we do not have the knowledge of how the tax will be applied because the accountant, who is in charge of these issues, has not come. There are customers who have asked us if we are charging the tax and we answered that it is already included in the price of the product, but that we are not reflecting it as such on the invoice,” said the manager of a jewelry store.
In a clothing store located on Paris street in Las Mercedes, they began collecting the tax on Friday. The saleswoman pointed out that first they consult the client regarding their payment method. If you cancel with a card, they only charge the 16% VAT, but if you have foreign currency in cash, they inform you that they will charge the 3% tax.
“People are not nervous. That started on Monday, but people aren’t buying since last week… people don’t read the official Gazette. No one is aware of that, only we who are in charge of business, “said Yudit Granado, manager of the LUV store in the Tolón Shopping Center.
He assured, while showing the official Gazette printed on the counter, that the few people who have been charged the tax have not made any comments once morest or in favor of the new regulations.
«They cancel it and that’s it: 1 or 2 dollars more, because that’s what it is. Sales have been very low at the mall, it’s not just us. We have two weeks with super low sales. Here I have the official Gazette placed so that people know that we are a retention agent. Every 15 days we must declare it.
He said that upon learning of the law, they called a meeting with the company’s accountant and explained to the staff everything related to the regulations, with information that Seniat sent them.
25% of businesses charged the new tax
Tiziana Polesel, president of Consecomercio, revealed at a press conference at the Eurobuilding Hotel that only 25% of businesses collected the new tax on foreign currency payments in the first week of its entry into force.
«In our investigation with the sectoral and regional chambers we have had worrying figures. 75% of the companies surveyed are not able to receive payments in foreign currency because they have not been able to complete the process of adapting their systems to the new tax,” said Polesel.
He clarified that there were few companies surveyed at the national level that were able to update their administrative systems and their fiscal machines to start collecting the tax.
“A large part of the commerce and services sector is not able to respond to this tax. We are really in a very complex situation to comply with this, “he added.
The president of the Caracas Chamber of Commerce, Leonardo Palacios, described the application of the IGTF as chaotic during its first week due to the “improvisation and absence of public consultation.”
“The application of the tax was total chaos. This is the product of improvisation and the absence of the public consultation that is necessary, not only for citizen participation but also for the practical effect of bringing to the legislator knowledge of the application of the tax and a way to make the tax viable; this implies participation of the commercial, academic, and tax administration specialist sectors », he expressed.
He indicated that the IGTF generates resistance due to the lack of transparency with which it was imposed. He considered that the situation might cause a setback in the slight economic improvements that have been registered in the country in recent months.
“If you want to have economic growth, you can’t have taxes like this,” he said.
“That is a very bad law”
Consumers also rejected the entry into force of the IGTF for having to pay a 3% tax for the use of currencies or cryptocurrencies other than the petro.
“That is a very bad law because with what they pay us we do not cover our needs. Do our families have to send us dollars to take away the 3%? I don’t think so, “said Luisana Gómez in Petare.
“This law is to retain the local currency, so that people do not pay in foreign currency. I am neither for nor once morest. I have not read the law to give an opinion. The dollar is for you to deposit and for the bolívar to continue circulating, but I don’t know anything regarding the law, I haven’t seen the gazette… But then eliminate VAT for me; because if I am going to pay in foreign currency, VAT should not be there,” said a man in Chacao who preferred not to identify himself.
While Óscar Linares assured that the government promotes this law to force the population to use the bolivar more frequently: “I do not agree, they are forcing you to work with an increasingly devalued currency.”
