A recent survey by Netmag pakistan has uncovered a concerning practice at various food chain outlets, both international and local. Surprisingly, customers paying through digital methods like credit/debit cards or in cash are charged the same final price, despite different sales tax rates. The survey reveals that when customers opt for cash payments, they are subjected to a 16 percent sales tax, while digital payments incur a 5 percent sales tax. However, the outlets manipulate the system by charging different base prices for cash and credit card transactions, ensuring that the end price remains constant.
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This dubious technique aims to collect the same amount from customers regardless of the sales tax rate. By inflating prices for digital payments, the outlets indirectly force customers to pay the higher 16 percent sales tax, even though the intended benefit of reduced tax rates on digital transactions was initially introduced to promote a cashless economy.
One notable case at OPTP highlights this practice, where receipts for identical sets of products were compared. The receipt for cash payment indicated a 16 percent sales tax, while the digitally paid order receipt (via card) showed a 5 percent tax. Despite the apparent intention to offer savings to digital payment customers, the restaurant inflated the price for card transactions, contradicting their claim of a fair and unbiased system.
In response to inquiries, an OPTP employee asserted that all base prices are fixed, and the system generates receipts without bias. However, a comparison of identical bills for cash and card payments suggests otherwise, revealing a discrepancy in the application of sales tax rates.
This fraudulent technique not only goes against the original purpose of reducing sales tax on digital payments but also raises ethical concerns about transparency and fairness in pricing. Calls for regulatory intervention, especially from the Federal Board of Revenue (FBR), have been made to address and rectify such practices in outlets that charge the same amount for food products irrespective of the payment method used.
