Cash transactions ceiling is set to drop to 500 euros

The Finance Ministry is mulling incentives for the use of credit and debit cards By Prokopis Hatzinikolaou

Any transaction in excess of 500 euros will soon only be allowed via credit or debit card or by check, according to a plan by the Finance Ministry aimed at combating tax evasion.

The ceiling for cash transactions is to be lowered from 1,500 euros today to 500 euros and could be reduced further over in the course of 2013. Ministry sources say that in the first quarter of the new year all companies and certain self-employed individuals will have to obtain the POS (point-of-sale) terminals that provide for card transactions.

This forms part of the government’s plan to contain tax evasion and increase state revenues. Ministry officials stress that public revenues can only grow through beating tax evasion, as there can be no more cuts to expenditure except for procurements.

The ministry is also making plans to create incentives for taxpayers to use payment cards and checks, either through the return of some money or via bonuses. “The changes we are planning for 2013 include incentives to encourage citizens to use means of electronic payment in order to attain greater transparency in transactions and to combat tax evasion that is facilitated by the use of cash,” Deputy Finance Minister Giorgos Mavraganis told Kathimerini.

“As you know, transactions in excess of 1,500 euros are currently not allowed to be conducted in cash. We will have to review this limit and generally we must see how we can make it easier for Greeks to change their years-long habit of paying for goods and services in cash and instead use other means of payment. This is a problematic situation in our country that has to change, albeit without upsetting social cohesion,” the deputy minister added.

Although the government is determined to move ahead swiftly with legislation that will make it obligatory to use payment cards for transactions, it has not yet decided on the incentives to encourage taxpayers to do so. “Rewards to citizens who use electronic means of payment as a rule are in other countries provided through gifts or money. We still have to examine certain issues pertaining to European Union legislation and we will have to think very hard about how forms of bonuses in transactions have worked in other countries,” Mavraganis noted.