E-transactions bolster coffers
State stands to gain additional 500 million euros in tax revenues thanks to use of cards
The state coffers stand to gain an additional 500 million euros this year as a result in the increase in electronic transactions.
According to Finance Ministry data, the increase in electronic transactions alone (without taking into account the good course of tourism) is leading to the containment of tax evasion and, by extension, a rise in public revenues.
At the same time, there is a strong possibility that the use of card terminals and cash registers will be expanded throughout the economy. However, there are two trends within the ministry, namely some pushing for their expansion and others fearing the political cost. In fact, it has been proposed that the cash limit be reduced in both consumer and business-to-business transactions. Today that limit is 500 euros: Above that amount, transactions between individuals – consumers and businesses (for the sale of goods or the provision of services) – must be made exclusively using cards or other electronic means of payment.
Ministry figures show electronic transactions have led to an increase in value-added tax revenue and a reduction in the circulation of black money. Ministry officials estimate that this amount will increase significantly with the interconnection of cash registers with POS from 2023, and with the obligation to transmit transactions (receipts) to the Independent Authority for Public Revenue from the end of October. Those who do not do so can expect major fines and orders to close their businesses for up to 96 hours.
Based on the ministry’s data, electronic transactions compared to 2019 have increased by 62.5%. In 2019, purchases with cards or other electronic means reached €40.6 billion. In 2020, when the pandemic started, they came to €44.7 billion euros, and in 2021, with the economy virtually closed for five months, electronic transactions reached €53 billion, when private consumption reached €125 billion.
This year online transactions are estimated to increase by 25-30% and reach levels of more than €65 billion.
