When was the last time you consciously asked a receipt for your purchase for any other reason apart from avoiding security mishaps? If you are having a difficult time remembering, then you just might want to rethink your ways as that little piece of white paper could turn into green bills.
The rest of the globe is continually affected by tax revenue losses caused by business establishments who shun sales tax through non-issuance of receipts to their clients. However, the Puerto Rican government takes a creative step to remedy such dilemma by recently launching a program where purchase receipts are converted into lottery tickets in a campaign against tax evasion. And how exactly does lottery help in such serious and weighty mission?
Each receipt will be assigned a unique lotto number by the Treasury Department and in true lottery fashion, weekly draws will be held with monetary prizes starting from $100 up to a whopping $1000. And as if that was less exciting, a monthly prize of a brand new car is also said to be in the offing.
The government strongly believes that by motivating consumers to demand receipts, various business types like food stalls mushrooming in almost every sidewalk and trusty mini-stores around the corner will be encouraged or compelled to issue receipts, and will thereby comply with the 7% sales tax. In turn, this will address the government's long-standing problem of tax evasion cases that severely diminished the Puerto Rican tax collection last year to only 52% of the actual tax.
Since this campaign primarily involves a human element and a rather complex task of a reversal in the attitude of the consumer, a number of economic experts are pessimistic about its success. To further validate the skepticisms, not even one claimed the prizes for any of the 8 winning lottery tickets since its pilot launch last December 2010. At the end of the 30-day redemption period, no winner was so far declared.
Apparently, the said project lacked exposure and the public had no awareness of its existence whatsoever. Some consumers were noted to react incredulously after they were informed of the program's functions. The mechanics just didn't seem plausible for them.
Like any well-structured plan with a contingency plan, a prompt solution was quickly proposed by the officials. And what else could make publicity more effective than a massive information drive through tri-media i.e. television, radio and print. The promotion of the program is aimed first at the residents of the southern part and the second largest city in Puerto Rico, Ponce City, where the retail lottery was first inaugurated. Eventually, it will have streamed in the consciousness of the entire island's inhabitants as the program reaches full expansion.
The promotional costs and equipments needed for the operations among many other things constitute the $16 Million budget shelled out by the government to finance the said project. However, the aforementioned figure is diminutive compared to the projected additional sales tax revenue amounting to $400 Million in 2 years, should this campaign be a resounding success. In addition, given the proliferation of tax evaders and its consequential damages to an already recessive economy, any major measure taken to fight these would definitely be worth every penny.
This brilliant concept however is not new nor is it the brainchild of the Puerto Rican government. Rather, the idea was culled from a similar scheme instituted by the Argentine descent.
Sharing the same predicament of black market sales and underground economy, officials from the second largest country in South America gave due attention to consumer behavior and focused on disciplining the consumers to always and unfailingly ask for a receipt after every purchase.
After running the said program for 2 years, tax collection improved dramatically and tax revenues increased as hoped, thus proving to be very fruitful.
Going into its 3rd month of operation, the program will be implemented in the entire island of Puerto Rico by the 1st of July. Businesses were aptly informed and warned that fines of $20,000 and $100 will be imposed to anyone caught not using official receipt machines issued by the state and denying consumers of their receipts respectively.
Although it is posited that neither a change in the consumer nor in the business owners' mentality will be immediately palpable as early as the first quarter of the year, officials of Puerto Rico remain positive about this endeavor. After all, this is a win-win situation for both the government and the consumers they are protecting.
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