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Italy backtracks on pro-cash plans

Italy backtracks on pro-cash plans

Italy's government has scrapped plans to let merchants refuse digital payments of less than €60 after pushback from the country's central bank and the EC.

In its draft budget earlier this month, the rightwing coalition government led by Giorgia Meloni proposed eliminating a rule which states that merchants have to accept electronic payments of any value or face fines of €30 and four per cent of the transaction value.

The rule had been introduced as part of Italy's post-Covid national Recovery and Resilience Plan and linked to around €200 billion in funds from the EU.

Now, Italian economy minister Giancarlo Giorgetti says: “We intend to eliminate the measure on points of sales.”

During testimony on the budget, Giorgetti suggested that the government may instead put in place compensatory measures to help retailers pay card fees.

The climbdown comes after criticism from the European Commission, which had argued that the planned change would not be consistent with efforts to boost tax compliance.

The Bank of Italy's economic research unit chief, Fabrizio Balassone, also weighed in, saying that "limitations to cash use pose a hurdle to several forms of crime and [tax] evasion."

Although it has carried out one U-turn, the government intends on sticking to another related change which would see the legal limit for cash transactions rise from €1000 to €5000.

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