There are four days contemplated so that establishments or businesses, within the tourism sector, apply the value added tax (VAT) reduction on products or services during the carnival holiday.
It begins on Saturday February 26 and ends on March 1, 2022 and on that date the VAT collection goes from 12% to 8%, with the aim of encouraging tourism and reactivating the economy.
To make this procedure effective, businesses such as hotels, restaurants, tourism agencies, travel agencies and others require adjusting or changing their accounting systems, a highly variable task. And that for some establishments it has become complicated.
Diego Vivero is executive director of the Confederation of Restaurants of Ecuador that brings together more than 2,000 businesses. He affirms that they are working against the clock to see how to proceed. He says that this is not about changing 12 for 8, that it doesn’t work that way.
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“This situation is not so easy in the operational field. However, we believe that the test must be done, if this responds to local tourism, which is the intention, ”he indicates.
He mentions that this change must be made tied to the final sale price and for that there are two options: “That 8% be calculated maintaining the final price and the other is to enter all the prices of each of the products in the system with the value of 8%. For example, a product that costs me $10 sells for $11.20 (for 12%), that is entered into the system, the $11.20. But, now with 8% it would be $10.80. That has to be done with all the dishes and drinks in a restaurant”, he explains.
Vivero also owns the Pizza SA restaurant chain and is looking for a way to make the change less tedious. He has more than 80 items and says that “putting a person to do it and then on Tuesday night (March 1) again to change it again is a complex job.”.
John Hidalgo, Audit Corporate Director, specifies that the procedures are different. For example, a company, which has its supplier, can request the change for those days and it is done. Another case is that when using the cash register the VAT is reformed and invoiced in that way.
“I don’t see it as complex for those who have access, those who don’t have access should ask their provider for support,” he says.
According to Hidalgothese adjustments should be made on the night of February 25 when the box is closed and completed on the night of March 1, likewise when there are no more sales.
Instead, Gina Macías, Master in Taxes, indicates that the business challenge lies in knowing if he software they use allows them to make such a change or not.
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“It is probable that in solutions of software conventional implies costs, due to the adjustment, and also businesses that use high-end platforms do not feel any effect in terms of additional costs, “he says.
Macias also ensures that there will be businesses that do not have electronic invoicing processes. And the alternative is the manual way.
A hotel in Quito and a tourism agency in Portoviejo will do it that way, but both intend to take advantage of this reduction to increase their demand.
Cristian Caicedo, manager of Rincón Familiar Hotel Boutiquementions that they are going to invoice manually and thus account for VAT at 8%.
He affirms that at the moment they already have reservations and what they will do is inform the tourist upon arrival that the final price will no longer be considered under 12%, but with 8%. However, he is concerned with the mechanism of datafastwhere some of its customers do pay with a credit and debit card. He says he doesn’t know how to proceed in that case, but this week he will meet with his accountant to find a solution.
Here is the list of tourist establishments that will apply the VAT reduction from 12% to 8% during the carnival holiday
“The point is to boost the economy and have more visitors in Quito. Although Quito is not a favorite destination for carnival, this decrease in VAT helps us to mobilize more people, ”he asserts.
Edi Bravo, owner of the Wanderlust agency, is ready to receive tourists. It is also operated manually and with datafast. Like the other business, they are analyzing how to make that change.
They await the arrival of visitors for the tours they offer in Puerto López and Crucita. “Yes, there are quite a few queries and some reservations. There are people interested in vacationing on the holiday, but none makes reference to VAT”, he points out.
And precisely on this procedure of how to incorporate the reduced VAT rate, the Ministry of Tourism and the Internal Revenue Service (SRI) had announced training sessions. These were held on February 10, 11 and 14. (I)
Source: Eluniverso
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