Tax & Accounting Blog

Puerto Rico Eliminates the Sales Tax Lottery

Blog, Indirect Tax, VAT Tax Rates, VAT-GST Management November 3, 2015

Imagine you go to the store and buy something and you are entered into a drawing for cash or a gift card. In Slovakia, receipts from stores and other merchants can be entered with the government for prizes. There is an app for  your mobile phone which lets you register the receipt.

In fact, in Taiwan the most recent drawing the grand prize was 10 million TWD or $300,000.

VAT lotteries are a way to encourage tax collection and payment by having ordinary people make merchants issue tax receipts. Also, when people try to file their receipts and the receipts are denied then the receipt holder can file a motion with the government to inspect the books of the receipt issuer.

Slovakia, Malta, Poland, Portugal and Taiwan all have VAT lotteries. Poland started its VAT lottery in September.

Puerto Rico eliminated its Sales Tax lottery (IVU Loto) effective October 1 because the system had not helped the government get more information about businesses. Instead it will be introducing a set of new terminals which will give the revenue department more information about businesses. Another reason the IVU Loto is being eliminated is because there were reports of people being able to enter thousands of invoices and winning twice in a single draw.