The Italian government is partially reversing its war against electronic payments

Posted Dec 19 2022 at 04:03 PM

Giorgia Meloni renounces the Christmas gift intended for its electoral clientele, small traders and taxi drivers in mind. Following criticism from the European Commission, the president of the council removes from the 2023 budget the standard for refusing digital payments in Italy for any amount below 60 euros.

Declared war on digital payments

The Italian government had to correct the most emblematic but above all controversial measure of its finance law. It wanted to promote consumption by facilitating cash payments and giving merchants the right to refuse the credit card for any amount less than 60 euros.

The government of Mario Draghi had on the contrary obliged merchants to accept electronic payments for amounts lower than 60 euros, under penalty of a fine of 30 euros, to which was added 4% of the price of the transaction. This measure, which the new government wanted to cancel, therefore remains in place.

The increase in the ceiling for cash payments from 1,000 to 5,000 euros proposed by Giorgia Meloni is however maintained. For economists as for the opposition, this is a real step backwards after the opportunity represented by the Covid to develop electronic payments.

Measures that encourage tax evasion

“Higher thresholds for cash payments promote the underground economy,” warned Fabrizio Balassone, head of economic research at the Italian central bank (Bankitalia). This will make it more difficult to crack down on tax evasion and runs counter to European requirements. »

He was only anticipating the opinion of the Brussels Commission, which must soon pay Italy the next tranche of 21 billion euros as part of the post-Covid recovery plan. Rome must therefore respect its commitment to an effective fight against tax evasion. This is estimated at more than 100 billion euros per year while the peninsula occupies first place in the ranking of European countries for VAT fraud, with 26.2 billion euros not collected by the tax authorities.

Banks in the line of sight

Italy, on the other hand, is in last place in the ranking of European countries using credit cards. There are an average of 85 transactions per card per year and per inhabitant compared to 156 in its neighbors . Giorgia Meloni criticizes the excessively high commission rates imposed by banks on merchant payment terminals for small purchases. “It is no longer tolerable to impose a hidden tax on the economy, with the aim of fattening the banks, spying on consumer behavior and making easy money,” said the president of the board.

She is now considering the introduction of a tax credit to support traders. The government did not retain the idea of ​​parliamentarians from its majority wanting to resort to a solidarity contribution weighing on the banks. “It would be unconstitutional,” threatened the Fabi, the main union in the Italian banking sector.

The Italian government is partially reversing its war against electronic payments