Customers at various food chains, both international and local, pay the same price whether using digital methods like credit/debit cards or cash.
A survey conducted by ProPakistani revealed that astonishingly, the electronic bills generated through payment of 5 percent sales tax (cards) or 16 percent sales tax (cash payment) are the same at some food chain outlets.
If a customer is making a payment in cash, the sales tax rate of 16 percent is charged. On the other hand, if payment has been made through digital cards, a 5 percent sales tax is charged.
However, the outlets are charging different base prices on cash as well as credit cards for collecting the same prices on payment of 5 percent of 16 percent sales tax. The bottom price has been kept the same by using the technique of charging different base prices on cash as well as credit cards.
The purpose of this fraudulent technique is to collect the same amount from customers paying a lower rate of sales tax or a higher amount of sales tax. The prices are inflated to ensure that the customer making digital payment should also indirectly pay higher rates of 16 percent sales tax.
In one case at OPTP, a comparison has been made of both receipts issued for an identical set of products from the same restaurant. One is for cash payment, where 16% sales tax is supposed to be charged, and one is for a digitally paid order where tax is supposed to be charged at 5%. When a customer opts to pay by card, the restaurant in question inflates the price by the difference instead of passing on the intended savings to the consumer.’
In response to a query by ProPakistani, an OPTP employee said all base prices are fixed and the system generates receipts without bias. “The full receipt is calculated by determining whether the payment method is via cash or card. Either way, the system will generate the same bill amount. We do not over-charge,” he argued, while the following comparison of the same bill (cash/card) says otherwise:
Both receipts are for an identical set of products issued minutes apart, as seen on the time stamps above. One is for cash payment, where 16 percent sales tax is being charged, and one is for a digitally paid order (via card) where tax is 5 percent. NOTE: The receipt on the left tells us that the restaurant is NOT reporting card transactions back to FBR.
It is evident that when a customer wants to pay via card, the restaurant is inflating the price by the difference as opposed to passing on the intended savings to the consumer.
The reduced sales tax on digital payments was first introduced as a tax break and to encourage a cashless economy. But restaurants want to increase their profits when the customers should be getting the benefit.
The regulators, especially FBR, must take prompt action against such outlets, which are charging the same amount for selling food products despite payment through digital cards.
