Why Are Merchants Afraid of QR Payments? - Interview with the Deputy Head of the State Tax Service

In the context of active discussions on social media and in the media regarding merchants' preference for cash transactions in markets and their refusal to use QR payments, the State Tax Service (STS) clarified that the main reason for such behavior lies in the fear of liability for using QR codes registered to individuals in commercial activities. It is important to note that the tax service does not have direct access to citizens' wallets, and control is primarily exercised through banks.

Deputy Chairman of the STS Azat Almanbetov, in an interview with Tazabek, spoke about the fines that can be imposed on businesses for using personal wallets, as well as the existing legislative norms.

-Recently, it has been observed that many merchants, especially in markets, refuse QR payments in favor of cash. How do you comment on this?

- In the context of the current moratorium on inspections of entities in markets and mini-markets, it is difficult for us to rely on accurate data regarding the scale of the refusal of QR payments. Nevertheless, there is active discussion on the internet, including publications in the media and blogs, stating that some citizens and entrepreneurs do not want to use QR payments.

The main reason lies in the introduction of liability for using QR codes and electronic wallets registered to individuals in the field of entrepreneurship.

- If an entrepreneur uses their personal electronic wallet for business, is this a violation?

- Yes, this is a violation. According to banking legislation, entrepreneurs cannot use personal wallets and accounts for conducting business. All accounts must be used for their intended purpose: personal for personal needs, and business accounts for commercial activities.

-How is control over this carried out? Who is responsible for oversight?

- Control is assigned to commercial banks. They are required to follow the "Know Your Customer" (KYC) policy, identify suspicious personal wallets, and take appropriate measures, including blocking accounts.

The STS collaborates with the National Bank and commercial banks. Previously, before the introduction of the liability norm, we identified cases of using personal wallets for business during monitoring and forwarded the information to banks and the National Bank. In cases of such findings, banks blocked accounts within their frameworks.

The National Bank can also take measures against banks for insufficient control.

- Why is the state tightening control over personal QR wallets in business?

- We are recording risks of tax evasion and concealment of income, including among large taxpayers who are not subject to the moratorium on inspections.

There are cases where organizations accept payments for employees. For example, in the catering sector, there have been instances where payments were accepted into the personal wallets of waiters or administrators, rather than into the accounts of organizations.

- What are the fines for using a personal wallet for business purposes?

- For the first violation, a warning is issued, which is recorded protocol-wise.

If the violation is repeated, fines are imposed:

for individuals - 5,000 soms

for legal entities - 20,000 soms

In cases of repeated violations, the fines increase:

for individuals - 13,000 soms

for legal entities - 65,000 soms.

-You claim that you do not have access to the data. Will banks provide it?

- The STS does not have access to citizens' electronic wallets, and we can obtain such information only by court order.

-How do you find those who use personal QR codes for business?

- We can identify violators only during control activities, for example:

raid control

controlled purchases

inspection of the trading point

An inspector can see if there is a QR code of an individual in the trading point, rather than a business one, which indicates a violation.

-Thus, due to the moratorium, you cannot conduct inspections and fine sellers in markets?

- In markets, mini-markets, and certain segments of retail trade, there is a moratorium on inspections, so the focus is on explanatory work.

However, there are categories to which the moratorium does not apply, particularly large taxpayers. We apply stricter control to them, especially regarding VAT payers, where the risks of budget losses are higher.

- The consumer protection law does not allow restricting payment methods for buyers. The tax service prohibits personal QR codes. Isn't this a contradiction?

- There are no contradictions. The consumer protection law requires that the seller does not restrict the buyer in payment methods. At the same time, banking legislation obliges entrepreneurs to accept payments into a business account, not into a personal account of an individual. Thus, cashless methods must be available, but to the correct account.

- Banks will not control a seller in the market, for example, selling potatoes. Who is then responsible for controlling a seller with a small turnover?

- Banks have mechanisms for remote control based on risks. If a personal wallet receives amounts from various individuals, the bank may react, including blocking. Then the wallet owner must contact the bank and explain the nature of the transactions.

From the perspective of the tax service, considering the moratorium, in markets we mainly check registration and tax payments, and regarding QR payments, cash registers, and electronic invoices, there are restrictions on inspections for certain categories.

- What if the money to a personal wallet is received for charitable purposes, is this a violation?

- As we were explained, it is common practice to collect funds (including for charitable purposes) into personal accounts. In such cases, the initiators of the collection must notify the commercial bank in advance about the receipt of funds as part of the charitable collection.

- There are also cases where a parent committee collects money, for example, for textbooks, which is convenient. What about this case? There is no entrepreneurial activity here, but funds are received from various individuals.

- Each commercial bank has its own risk-oriented monitoring system. If the receipts are one-time or rare (for example, a collection once a month), this is generally not considered a high risk. But if the same account regularly receives money from different individuals, this is perceived as a risk, and the bank is obliged to take measures within its control procedures.

- Let's consider a situation where a seller uses a cash register, issues a receipt to a customer, but receives money for the goods or services into their personal wallet.

- Such practices arise due to the convenience of personal electronic wallets. But it is important to understand that using a QR code registered to an individual for receiving payments for business purposes is a violation.

Commercial banks note that with tax registration, opening a business account or business wallet can be done quite quickly. In some banks, this procedure is available remotely through a mobile application.

- Why do you think entrepreneurs do not open business wallets and continue to use personal ones?

The absence of fees for personal transfers also plays a role, while conditions for business accounts and acquiring may vary. The fee for POS terminals usually ranges from 1-3%. Also, for business accounts, there may be a "one banking day" rule, which makes funds available later, which can be inconvenient for small trading, where daily turnover is important.

Some people do not understand the difference between personal and business accounts, which can lead to risks of violations.

- Is there a list of those for whom cashless payments are mandatory?

- Yes, there is a resolution dated December 23, 2015, No. 869 "On measures to protect consumer rights," which establishes a list of types of activities (18 positions) in which cashless payment methods (POS terminals and/or QR payments) are mandatory. These include large trade, pharmacies, gas stations, catering, and others.

At the same time, the main rule is that personal wallets cannot be used for business purposes, regardless of the tax regime and the size of the business.

It is necessary to conduct explanatory work. People, not understanding, act at their discretion. What do you think?

- Explanatory work is indeed needed. Tax authorities conduct it within their competence. However, intervening in the banking sector would be inappropriate - this is the responsibility of the banking regulator and the banks themselves.

Nevertheless, we are ready to conduct joint explanations with the Union of Banks, commercial banks, and the National Bank, especially in those places where questions arise most frequently. We already have experience in joint control activities with the National Bank, and this format of interaction can be expanded to reduce the level of misunderstanding and unfounded fears among entrepreneurs.