It is not tax fraud [1]. Merchants are violating the terms of CC provider. The merchant agreement explicitly forbids merchants to have different cash price from what is charge with the card.

It is fairly common in geographies where CC providers can't litigate/enforce easily . It is not a penal crime, only a contract violation between two private parties and settled in arbitration/civil courts .

[1] Such Merchants also may commit tax fraud if they don't declare the cash income for tax purposes, that however is not directly related to Credit Cards or payment medium and usually even if they do commit tax fraud, they don't pass on their tax benefits for GST/VAT or Income Tax (10+% in most countries) to the customer.