Cash or card?
Cap on cash payments by private persons to companies causes concern among the population and experts.
Mihai Pelin, 07.11.2023, 14:00
Following a government
cap on cash payments in an attempt to keep tax evasion in check, a number of
banks in Romania have in recent days increased their fees on cash transactions.
Prime minister Marcel Ciolacu thus met the members of the Romanian Association
of Banks in which it was agreed that bank fees will not increase for private and
legal persons. Moreover, the representatives of the government and of banks
established a permanent mechanism for consultation together with the National
Bank.
Romania does not have an
economic problem and has natural resources and qualified labour, growing foreign
investment and a high level of public investment. To ensure economic
sustainability, however, we need to combat tax evasion, reduce budget expenses
and enhance the efficiency of the public administration, said the prime
minister during the meeting. The most important subject, however, is that
linked to the measure related to cash payments. Marcel Ciolacu said the
concerns raised in the public space are justified and must be addressed:
Small entrepreneurs have
a problem and cash payments may lead to never-ending queues at the bank. I
don’t think anyone wants this. We have to hold further talks with small and
medium sized businesses and find solutions, perhaps for different groups of
products.
The former Liberal prime
minster Nicolae Ciucă said the issue of cash payments must be revised after a
new assessment:
We have to either go
back to the previous cap of 10,000 lei, or hold farther talks with experts.
Liberal MPs have in the
meantime initiated a bill to return to the previous caps on the amount of cash
used in transactions by private and legal persons. Liberal MP Adrian
Cozma:
The bill proposes a
return to the initial version of Law 70 of 2015 which provides for a cap of
50,000 lei for transactions between private persons and 10,000 for those
between commercial entities.
The government’s move to cap
payments in cash to 5,000 lei has also come under criticism from the
representatives of the Employers Association of Small and Medium Sized Companies,
which say it is ineffective and that while seeking to reduce tax evasion, the
result may just be the opposite. Experts say the measure conceals the state’s inability
to collect taxes and that the banks will cash more money on card payments. They
also recall what happened in 2013 in Cyprus when the two biggest banks were
restructured and citizens were unable to take out more than 50 euros a day
using their cards. Some view the cap on cash payments for private persons as a
means of asset control from the state and the banking system. (CM)