Saturday, May 14, 2011

Thou Shall Not Covet

In an attempt to beef up its coffers, and strike a blow at tax evaders, the Puerto Rican government introduced the IVU Loto (its acronym stands for impuesto sobre las ventas y uso). The premise behind this idea is to have consumers demand retailers for a receipt, and money would be the natural incentive. The IVU tax was introduced back in 2007, and is levied on all purchases (except for essentials such as bread, water and milk) at 6% islandwide. Ever since its introduction, the amount received by the Department of Treasury (el Departamento de Hacienda) has been much less than what the government had projected. Tax evasion is the culprit, according to Treasury officials, as only half of the island's businesses are said to remit IVU tax payments. According to the government, the solution to this conundrum is to implement a lottery receipt system. Perhaps the folks over at Treasury were inspired by some Latin American countries, and some as far-flung as China, that have successfully implemented their version of an IVU Loto. In China, tax revenues from businesses have reportedly seen a significant increase.

On the island, the IVU Loto has already gotten off to a rocky start. Although it was supposed to roll-out in the beginning of this year, very few businesses have the IVU Loto system installed in their cash registers. One of the reasons for this long delay is due to the legal battle involving one of the contractors hired to implement the IVU Loto system. As I dig out a bunch of receipts from wallet, including from the major chains such as Walgreens, Bed, Bath & Beyond, among others, none have the 10 digit IVU Loto number. It wasn't until last week, when I finally got a receipt from a restaurant, that I was reminded of my shot at winning some hard cash! Come to think of it, if I hadn't paid with a credit card, I probably wouldn't have gotten a receipt. In any case, I didn't get lucky this time.

Aside from the government's failure, thus far, to fully implement the IVU Loto system, religious leaders have also cried foul. Their argument is that Tenth Commandment clearly states "thou shalt not covet." Participating in the IVU Loto is considered to be a form gambling, which is against their religion. Other critics contend that the IVU Loto will not incentivize underground businesses to emerge from the shadows. The root of the problem is the inefficiency and lack of trust in the local Puerto Rican government. In the meantime, at least some of us sinners will have a shot at winning $1000 every week. That is, of course, if we should actually get a receipt with the IVU Loto number on it. At the moment though, it doesn't seem as though people noticed or care much for it, as some of the IVU Loto winners haven't even bothered to claim their prize money.

To check and see if you have a winning IVU number, click here, and be sure to select "Ganadores."

(Note: The IVU Loto logo was obtained from the website of el Departamento de Hacienda)

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