For the past two weeks, three words have appeared on the front page of all Italian newspapers: “Tetto al contante”. An expression that could be translated as “cash withdrawal limit”. In the finance bill for 2023, approved by the Council of Ministers on November 21, the government of Giorgia Meloni plans to give more leeway to merchants to refuse payments by bank card.
Thus, the new bill proposes that one can pay in cash up to 60 euros of purchase, by raising the fines with the businesses which refuse the credit card. A measure that has caused an intense controversy in the Peninsula. “This budget law is a hymn to tax evasion”, notably protested Enrico Letta, the secretary general of the Democratic Party (PD, center left).
Another highly commented novelty, the authorization, from 1er January 2023, to be able to use banknotes to pay for transactions… up to 5,000 euros, while the cap on cash payments had been set at 1er January 2022 at 1,000 euros, like in France.
This spectacular measure, carried in particular by the League (far right) of Deputy Prime Minister Matteo Salvini, is a clear break with previous governments. Mr. Salvini’s party had even proposed raising the cash payment limit to 10,000 euros, a measure which was ultimately not adopted by Mr.me Meloni. “Walking around with suitcases full of cash does not meet the needs of citizens, but rather corresponds to the temptations of the corrupt and fraudsters”, thundered the boss of the 5 Star Movement (antisystem), Giuseppe Conte.
This controversy highlights the gray areas of a country that is struggling to break with the underground economy. “Raising the cash payment threshold to 5,000 euros is seen as an unwise step for a government that has promised to take care of the poorest, because it first concerns citizens who can afford it” , comments Leonardo Becchetti, professor of economics at the Tor Vergata University in Rome. “A transaction at 5,000 euros is that of a person who wants to do it black and avoid paying taxes”, he specifies.
These provisions also came up against the serious reservations of the Italian Central Bank
Even if the digitization of transactions has accelerated, the Covid helping, Italy is still very dependent on its cash. In its latest report entitled “Towards a Cashless Italy”, the European House-Ambrosetti think tank, based in Milan, notes that the country, the third largest economy in the euro zone, is on the 25e European rank out of 27 in terms of the number of transactions per card and per inhabitant.
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