Monday, 28 November 2016

Greece Is Not India? Hellenic Banks Plan "Tax On Cash Withdrawals" To Combat Black Economy

Greek banks have proposed a series of measures to combat tax evasion, strengthen the electronic transactions and limit the use of cash in the economy, and as KeepTalkingGreece.com reports, one of the measures proposed is a special tax on cash withdrawals.

Bankers reportedly stress that cash money can easily and largely be channeled in the black economy. Therefore, a tax on cash withdrawals will drastically reduce cash transactions and by extension the black economy.

The bankers suggest that also credit and debit cards as wells as new technologies enabling cash-less transactions even for small amounts and mobile phones can be used for the purchase of a transport ticket or a newspaper at the kiosk.

The bankers proposal to the government also includes:

-Mandatory use of cards or other electronic payment networks for every transaction with professions where there is strong evidence of tax evasion or where cash is mainly used [ like bakeries, kiosks, street vendors and chestnut sellers?].

-Mandatory use of cards or electronic networks for transactions above a certain amount [this measure is already in effect].

–Reforming the tax system by introducing a revenue-expenditure system. Households or professionals will only be taxed on the amount of income that is has not been spent. In this way, households and professionals will have a strong incentive to seek receipts for any expenditure in order to increase their expenditure and reduce the tax amount they will have to pay.

-Obligation for all businesses and regardless of their size to pay electronically every salary and wage. (source: Kathimerini via Liberal.gr)

I cannot say who came with this revolutionary idea, some genius young academics or the Greek bankers themselves, those over 60 who have their secretaries or their kids doing their transactions for them using their own iphones and ipads.

I have no idea whether they have asked the country’s creditors to reform the tax system in a cash-less more-incentives Greek world, where households will be obliged to use revenue-expenditure books.

I absolutely do not understand how can one sleek and glossy group of bankers propose such measures and rule the economic system of a country where some 30% of population lives or is at risk of poverty, the welfare system has collapsed and thousands of families live on the 20- or 50-euro banknote a relative or a friend secretly stick in their pockets so that they buy some food, medicine or pay a small bill.

Not to mention those over 60 with minimum knowledge of electronic devices and applications and those over 80 who cannot even use a mobile phone.

Tax cash withdraws will of course give “capital controls” a new dimension.

I suppose the whole proposal has been drafted by a group of some academic professionals stuck in a huge bubble- Prove me wrong!

Are we going now about to ban cash and become India?

- Source, Zero Hedge