Turkmenistan’s revenue service still obliges owners of privately-owned retail outlets, cafes and other shops to install credit card terminals on a mandatory basis.
“Chronicles of Turkmenistan” has previously reported that residents do not use bank cards and do not keep money in bank accounts.
This time we managed to talk to a vendor running a point of sale in Ashgabat.
Verifone VX520
According to him, entrepreneurs are reluctant to install PDQ machines. The primary complaint is about the high price of the equipment Verifone VX520 terminal costs 1400 manats ($400 using the government-established rate or $212 at the “black market” rate). However, apart from a terminal, entrepreneurs are now also obliged to install cash registers.
Daisy Perfect S
The most popular model, Daisy Perfect S, costs 1800 manats ($514 using the government-established rate or $273 at the “black market” rate). “This is happening during the crisis when revenues are not high and there is some struggle to break even”, the businessman complains.
In the following conversation, however, we found out other reasons why entrepreneurs are so reluctant to install terminals and accept payments with bank cards.
The problem is that now entrepreneurs save almost everything and very often understate their revenues to avoid paying taxes and pension fund contributions. When bank cards and terminals are used all transactions are made through bank accounts and registered at the internal revenue service and cannot be concealed.
Moreover, the owners of retail outlets and other business are obliged to pay “tribute” on a regular basis to various regulatory agencies (fire fighting and public health services), as well as “supervisors” from the law enforcement authorities. For this they need cash.
Finally, vendors need cash to subsequently exchange manats to US dollars on the black market and buy a new batch of merchandise.
Interestingly enough, employees of the internal revenue service do not take any bribes under any circumstances. “It appears they have been strongly pressured”, — a source of “Chronicles of Turkmenistan” assumed, hinting at the anti-corruption campaign launched a few months ago.
If no terminal is available in a retail outlet, a warning is issued and a month is given to install a PDQ machine.Otherwise a fine of 500 manats ($143 using the government-established rate or $75 at the “black market” rate) needs to be paid.
After several violations, a fine can be increased to 3000 manats ($857 using the government-established rate or $455 at the “black market” rate).