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Retroactive return of 2% VAT leads to recovery of card holders’ confidenceThe return of 2% of VAT for purchases with debit and credit cards did not occur in 2013 due to the fact that the tax reform issued in that year included a new consumption tax mainly applicable to foodservice and not subject to that benefit. The card issuers systems were not prepared to differentiate when a purchase was subject to a VAT or new tax. A more varied range of VAT for different products and services also hindered the task. This is why the DIAN (Dirección de Impuestos y Aduanas Nacionales, or the tax and customs agency), announced the return, which importantly boosted card payments, would not be performed in 2013. This caused unease amongst consumers and card issuers as this regulation greatly bolstered the shift of stubborn cash users to financial cards. It also relieved in some way, the burden of the "4 x mil" tax (4 pesos for every Col$1,000?) in almost all of the financial transactions it is deducted from the transaction performer in the form of a tax. Finally, after a series of technical debates on how to perform this retroactive return, high courts and consumer defendant authorities ruled it was mandatory to return this acquired right to card holders. DIAN, in association with card issuers will made this retroactive return to card holders for the card payments made in 2013.
La Polar departure, a likely opportunity for other retailers
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