Many people refuse to take receipts after making purchases. According to a study conducted by Opinionway-Perifem, 54% of consumers accumulate receipts without using them and 56% of buyers ask retailers to throw their receipts away.  

However, taking receipts is much more important than it might seem. There’s always a risk that some business won’t conduct a transaction to pay less taxes or get away with selling counterfeit products, and a consumer won’t be even aware of that. Moreover, receipts matter a lot when consumers want to return or exchange goods and file complaints, as they are valid proofs of purchase. 

Receipts can also help consumers get partial VAT refunds without putting too much time and effort into it. For that, governments are encouraged to use a VAT Return Operator. 

What is a VAT Return Operator? 

A VAT Return Operator is a digital solution that allows consumers to receive partial refunds of VAT, cashback, discounts, and other benefits in exchange for registering their receipts on a website or mobile app. 

One of the primary challenges in using online electronic cash registers is controlling the issuance of fiscal receipts. It is important to ensure that every item sold is reflected in the receipt and that each receipt is passed on to the buyer. A system of incentives for consumers is necessary to address this issue, which is precisely what a VAT Return Operator is for. Possible incentive tools include special partial VAT refund, participation in a state lottery, loyalty bonuses, and discounts. 

The Results of Using a VAT Return Operator Worldwide 

Republic of Azerbaijan 

The Ministry of Taxes of the Republic of Azerbaijan started the implementation of a VAT Return Operator in 2020. 

According to the system, consumers can refund 17.5% of VAT applied to non-cash payments and 5% of VAT applied to cash payments to legal entities and individuals operating in trade, catering, and medical practice. 

In the hotel business, VAT refund reaches 30% for non-cash payments and 5% for cash payments. 

To receive a VAT refund, there are 3 conditions: 

• The consumer must be an individual. 

• The seller must be a VAT payer. 

• The seller must use an online electronic cash register. 

VAT refunds are transferred to the user's virtual wallet in 30 days from the date the receipt was printed.  

With these refunds, users can make utility, mobile, Internet, TV, penalty and insurance payments, as well as transfer them to domestic bank cards. 

Results of implementation: 

From the implementation of the VAT Refund project until March 1, 2024, the volume of refunded VAT amounted to US $320 million on more than 1.4 billion cash receipts. 

In 2024, more than 2.7 million users have been registered on the portal www.edvgerial.az to refund part of the VAT paid for purchased goods. 

Republic of Uzbekistan 

The Tax Committee under the Cabinet of Ministers of the Republic of Uzbekistan has been paying VAT cashback for purchases made by individuals since the beginning of 2022. Cashback can be returned when a remote payment is made through electronic payment applications of commercial banks (including mobile applications such as PAYNET, OSON, PAYME, CLICK, APEL-SIN) and through information systems of electronic commerce platforms, or marketplaces. 

VAT return can be received by: 

• Individuals who make purchases at retail, catering, and household services facilities. After registering a receipt in the mobile app, they will get back 1% of the purchase amount at the end of the month. There are exceptions, such as payments for the purchase of cars, railway and air tickets, utilities, and communication services, as well as receipts received when paying through payment system operators. 

• Individuals who notify the tax authorities through a special program about violations by sellers, such as selling counterfeit and non-marked products, as well as non-issuance of receipts or similar documents. Such individuals are paid a reward in the amount of 20% of the fine imposed on the violator. 

From January 1, 2022, to May 1, 2023, the cashback amount was 1% of the purchase amount. Since May 1, 2023, the Tax Committee of the Republic of Uzbekistan has been returning 12% of the amount of paid VAT on certain types of goods for low-income individuals.  

Results of implementation: 

In January-February 2023, the mobile application Soliq registered 77.8 million consumer checks with the amount of cashback 218.8 billion Uzbekistani sum (approximately $16.8 million), of which in February 40.6 million checks with the amount of cashback 113.8 billion Uzbekistani sum (approximately $8.8 million). 

Mongolia 

The Government of Mongolia has been revised its VAT law three times since its approval in 1998 and adopted a new VAT law effective on January 1, 2016. According to the General Taxation Law (GTL), each taxpayer must use a Point of Sale (POS) machine that is consistent with Mongolian standards, which shares basic sales information automatically with the tax administration. 

To encourage citizen participation, the law mandated refund of 20% of the tax paid by the consumer based on the payment receipts printed by the POS/cash resisters. The government’s VAT promotion scheme to improve VAT compliance has two parts including introducing the above-mentioned POS machines at different retail outlets for business-to-consumer (B2C) transactions, and an e-invoice system for business-to-business (B2B) transactions. 

This system generates a unique QR code and a lottery code on all customer receipts. Consumers who scan the QR code and upload the receipts into the e-BARIMT system are eligible for a 20% refund of VAT and become eligible for a lottery. This system is now installed in 36,900 of the 59,814 establishments generating e-invoices. 

As a result of the revised VAT Law, the number of business entities that are registered into the E-Barimt system has been increasing, which in turn expands the tax base. 

Results of implementation: 

Since the beginning of 2016, the amount of VAT income increased 2.2 times a year on year for the first two months of implementation. A total of 29,880 entities and 37.045 cash registers were connected to the system, which is impressive because only 12.000 POS machines were registering non-cash transactions before.  

With the conversion from paper receipts to online receipts, it became easier for entities to report to the tax system and created an opportunity to reduce stress related to tax reporting. It also stopped the allocation of about 300 million MNT ($87.3 thousand) for paper receipts in the government budget. 

There is now a total of 415.493 people registering their receipts through the Ebarimt.mn website.   

In the first 2 years of the E-Barimt consumer motivation system’s operation, the prize fund amounted to almost $3 million. The number of consumers who won the lottery was 274.871 in the first 2 years alone.   

Kyrgyz Republic 

From May 10th to the end of 2023, a state lottery called “Demand a check, get a prize!” was in operation in Kyrgyzstan. 

To participate in the lottery, consumers downloaded the Salyk Chek mobile app, registered, and requested cash receipts for each purchase or service.  

Consumers received lottery tickets for each receipt scanned by the app. The more receipts were scanned, the higher was the chance to get a prize. 

In 2023, tax authorities held two stages of the lottery, during which 2.376 valuable prizes were awarded. Among them 10 apartments, 20 electric vehicles and 6 trips abroad. 

Results of implementation: 

As of December, 25th, 2023, the total number of lottery tickets was 18.343.018. More than 42 thousand people became users of the Salyk Chek mobile application. The participants scanned 2 million cash receipts worth US $22 million. 73.8 thousand new cash registers were registered in 2023.  

Why Choose traceCORE VAT Return Operator 

traceCORE VAT Return Operator is a digital solution that encourages consumers to request receipts, thereby reducing the number of informal transactions. 

After its implementation, consumers will be able to register their receipts via a special application or on the official website of the VAT Return Operator. 

The process is simple, here’s how it works: 

1. Collect the receipts that you are given after paying for goods and services. 

2. Register in the mobile application or on the website of the VAT Return Operator. 

3. Scan the QR code or enter the receipt details manually. 

4. Receive a partial refund of VAT or the opportunity to participate in the state lottery, as well as bonuses from retailers, brands and financial institutions. 

Partial VAT refunds can be obtained in different forms, such as bonuses within a loyalty program, non-cash rewards on a debit or credit card, or in cash. 

Conclusion 

The VAT refund process offers valuable benefits both to governments and consumers. Governments benefit by promoting economic activity, enhancing compliance, and attracting foreign investment, while consumers enjoy financial savings, increased purchasing power, and the opportunity to shop more efficiently. 

traceCORE VAT Return Operator can play an essential role in fostering trust between governments and consumers by ensuring the VAT refund process is simple, transparent, secure, and efficient. Through clear communication, fair handling of claims, and reliable customer support, traceCORE VAT Return Operator can create a positive experience for consumers, which, in turn, helps build long-term trust and confidence in the government’s tax systems.