Making a quick QR payment on mobile banking apps now requires identifying whether the transaction is a business payment or a personal transfer. While the extra step may seem like a hassle when making a quick payment, the Department of Revenue and Customs says the information will help it track business income and improve tax compliance.
A QR code. A quick scan. And the payment was done. But now, there is one more step. Consumers have to select whether the payment is a business payment or a personal transfer.
All mobile banking apps added the option last month.
Transactions for goods or services, including shopping, rent, hotel and restaurant bills, parking fees and other commercial payments, should be marked as Business Payments.
Transactions involving money sent to family or friends, pocket money, personal contributions or reimbursements, on the other hand, should be marked as Personal Transfers.
The change is introduced as the Department of Revenue and Customs tries to address a gap in tracking business income.
The DRC requires individuals running businesses to maintain a Current Deposit, or CD, account, and businesses must route their business-related transactions through this account.
However, compliance remains a challenge.
The DRC inspected nearly 1,500 businesses over the last eight months and found more than 300 failing to use a CD account for business transactions.
The department collected around Nu 1.4 M in fines.
“Although we made it mandatory for all businesses to maintain a CD account for their business transactions, there was no proper compliance,” said Sonam Jamtsho, Department of Revenue and Customs’ Director General. “Now, the power lies in the customer’s hands, as they can choose the business transaction option when they pay in shops. And if they do that, it can help us while calculating tax accurately. That is why we came up with this initiative.”
The initiative has been developed by DRC in collaboration with the Royal Monetary Authority and banks. Banks are required to provide the DRC with data on transactions made under the business payment option.
The DRC also assures that it will not assess every payment made by an individual.
“We will not have access to every transaction of an individual, and we do not have the right to. We can only have access to the transactions made under the business option,” said the director general.
The Department collected around Nu 1.8bn in tax from businesses last year.
For customers, the choice may take only a second, but DRC says that small distinction could make a difference when business income is recorded, and taxes are assessed.
Deki Lhazom
Edited by Sangay Chezom
