Gov’t plan for forced use of cards runs into the market’s failure to adapt


TAGS: Economy

Greek businesses are not ready for the expansion of plastic money through the compulsory use of credit and debit cards for everyday transactions.

The government’s has told taxpayers that they will have to spend up to a certain amount of their incomes via bank and card transactions in order to qualify for an annual tax-free exemption. However, a large proportion of stores still don’t have the card terminals, or PoS (Points of Sale), required for card payments, while plastic is accepted by very few doctors, plumbers, electricians, lawyers and others who tend to account for the lion’s share of tax evasion recorded in the country.

A recent study by the Foundation for Economic and Industrial Research (IOBE) showed that increasing the use of cards for everyday transactions could increase state revenues by anything between 700 million and 1.6 billion euros per year, and that the market’s poor preparation means that the tax burden has been passed on to lawful taxpayers.

Data seen by Kathimerini reveal that PoS in Greece amount to just 220,000, and that despite the fact these were effectively forced on enterprises with the imposition of the capital controls, an estimated half of all businesses do not have card terminals. Finance Ministry calculations take the number of terminals the market requires for a satisfactory geographical coverage in the basic categories of small enterprises and of the self-employed to 450,000-500,000, which appears impossible for 2016.

As for consumers, the increase in the number of debit cards after the government imposed the capital controls has brought their total to 1.7 million across Greece.