Stores and businesses could lose margin with the 1.5% retention proposed by the Treasury.
The Ministry of Finance published a draft decree that seeks to eliminate the different treatment in the withholding rate at source between payments with credit or debit cards and those made through electronic transfers, QR codes, or digital wallets.
The document modifies three articles of Decree 1625 of 2016 —1.3.2.1.2., 1.3.2.1.7. and 1.3.2.1.8.— to establish a 1.5% flat rate on sales of goods or services made through any means of electronic payment.
Until now, card transactions were subject to this retention, while digital payments were not. With the new rule, the Government seeks to “level the playing field” between both schemes, arguing that they all guarantee traceability, formality and tax control.
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The initiative is known a few days after the Bank of the Republic launched Bre-Bits new immediate digital payment system, designed to facilitate low amount payments without costs or intermediaries.
Bre-B seeks to expand financial inclusion and reduce the use of cash, allowing individuals and small businesses to make transfers and purchases instantly.
However, with the application of the 1.5% withholding, operations made with Bre-B, Nequi, Daviplata, Powwi, or any digital wallet, they would no longer be completely freegenerating a fiscal cost that did not exist before.
Who should practice retention
The decree redefines who will act as retention agents. It will no longer be only the card issuing entities, but also the acquirers and aggregatorsthat is, the banks, payment gateways, fintech and platforms, which process digital transactions.
These entities must deduct the 1.5% withholding at the time of crediting or paying businesses that receive income from sales or provision of services. If the operation is carried out through an aggregator, it will be the aggregator who makes the withholding instead of the acquirer.
Furthermore, it is clarified that the natural persons not responsible for VAT They will be exempt from this obligation, although in practice many microbusinesses do not have the mechanisms to accredit this condition to the platforms.
Impact on small businesses and platforms
If the measure is approved, Small establishments that use digital wallets would be directly affected or electronic payment buttons.
For businesses with low margins – such as shops, hair salons, bakeries or cafes – a 1.5% withholding can represent a significant decrease in your income.
The technological platforms They must also adapt their systems to calculate, discount and report the withholding in each operation. This adjustment implies new operating costswhich could eventually be transferred to businesses or end users.
According to financial technology consultants, the standard could discourage the use of digital media and cause a partial return to cash, which has no discounts or withholdings.
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The Government’s argument
The Ministry of Finance maintains that the modification does not seek to raise morebut harmonize tax rules with the technological reality of the payment system.
The entity explained that digital instruments such as virtual cards or electronic transfers already offer the same conditions of security and traceability as physical cards, so they must have equal treatment before the law.
The Ministry of Finance also added that The measure does not generate fiscal or budgetary impactand that its application will improve the control of economic flows and the formalization of income in digital commerce.
Application and validity
If signed, the decree will take effect. from the day following its publication in the Official Gazette and will be applicable beginning on the first calendar day of the second following month.
During this period, financial institutions and digital platforms will have to adjust their systems to implement the new withholding.
The Government seeks equate tax treatment between traditional and digital payment methodsbut the measure could have the opposite effect than expected: make electronic transactions more expensive just when the country launches a free public payment system.
The underlying debate is whether unifying withholding strengthens formalization, as the Treasury maintains, or whether it ends penalizing digitalization at the moment when it is most needed to consolidate it.
This is the draft decree:
Source: Integrated Information System
