The People as their own Tax Collectors

At the supermarket, the checkout person asked for a "NIT", and I was wondering what that was. I asked Gab's Dad, who started his explanation the same way he starts all his explanations: he takes off his glasses, puts them on the table, and says "Well, Patrick, in order to answer dat, dere's a long story". I offer an abridged version.

Apparently, Guatemalan tax collection is not very efficient, especially in the grocery business—large amounts of grocery sales went untaxed. So, in a shifty but kind of brilliant move, the Government figured out how to shift the responsibility of collecting taxes to the consumers.

Every time you buy something at the supermarket, you give them a unique ID (the aforementioned NIT) which is printed on the receipt. Let's say you buy 10 Quetzales of avacadoes. Come income tax time, you submit your receipt for the taxes you paid on the 10Q and that amount is deducted from the income tax you owe. It also tells the government that the grocer owes them taxes for that amount, and they successfully collect it.

Now, suppose you can't be bothered to keep and submit the receipt—then the 10Q are included in your income and you pay tax on it. Either way, the Government gets its tax! And here's the brilliant part: it spends nothing on tax enforcement—it shifts all the responsibility (in terms of labour and cost in lost tax revenue) to the consumer!

The result? Probably every Guatemalan has a drawer like the one shown here, stuffed with the year's grocery receipts.