Plan to de­throne cash as king

Fi­nance Min­istry in­cen­tives in the works to en­cour­age Greeks to switch from pa­per money to plas­tic

Kathimerini English - - Front Page - PROKOPIS HATZINIKOLAOU

Al­ter­nate Fi­nance Min­is­ter Try­fon Alex­i­adis has said that the gov­ern­ment is con­sid­er­ing con­nect­ing the tax-free thresh­old to card pay­ments.

The new plan would change the way taxpayers col­lect ev­i­dence to­ward claim­ing their an­nual 9,000-euro tax-free al­lowance, switch­ing it from pa­per re­ceipts to debit or credit cards. Banks would then in­form the tax author­i­ties of the tax­payer’s an­nual ex­pen­di­ture. Those who don’t have pay­ment cards may lose their tax-free al­lowance, though ex­cep­tions could be made for taxpayers un­able to use such cards.

The pre­vi­ous pro­ject de­vel­oped by the eco­nomic team of­fered a cash re­fund for trans­ac­tions over 50 or 70 eu­ros. The mea­sure was put into ef­fect from July 1 on 22 is­lands, but was aban­doned.

The al­ter­nate fi­nance min­is­ter is pro­cess­ing new de­signs which he ex­pects to present soon to Fi­nance Min­is­ter Eu­clid Tsakalo­tos and Deputy Prime Min­is­ter Yian­nis Dra­gasakis.

Speak­ing to Vima FM, Alex­i­adis said: “We need to con­sider all mo­tives for all busi­nesses to of­fer card pay­ment fa­cil­i­ties. We must also give in­cen­tives to cit­i­zens to use the cards and have to see how we are utiliz­ing this en­tire sys­tem both for busi­ness and the citizen.”

The ex­pe­ri­ence of cap­i­tal con­trols shows that trans­ac­tions can be moved to an elec­tronic for­mat. From June 27, there was a surge in de­mand for debit cards, while the is­suance of e-bank­ing codes in­creased five­fold in July.

Den­mark has the high­est num­ber of card trans­ac­tions per in­hab­i­tant in the Euro­pean Union. Ac­cord­ing to Euro­pean Cen­tral Bank data, each Dane car­ries out an av­er­age of 243 elec­tronic trans­ac­tions a year. Leg­is­la­tion to com­pletely elim­i­nate cash by 2016 is the fi­nal step for fully elec­tronic trans­ac­tions.

By con­trast, in Greece, where con- sumers make on av­er­age only seven trans­ac­tions a year by card, in­cen­tives are con­sid­ered nec­es­sary. South Korea has the big­gest suc­cess story in this area, in­creas­ing card trans­ac­tions from 16 per­cent to 65 per­cent within a decade. The mo­ti­va­tion of a lottery was suc­cess­fully tested in Por­tu­gal and less suc­cess­fully in Ro­ma­nia, while in Latin Amer­ica the re­turn of 5 per­cent of the trans­ac­tion value on pay­ments by card is al­most uni­ver­sal.

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