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Greek banks propose “tax on cash withdrawals” to combat tax evasion

Greek banks propose a series of measures to combat tax evasion, strengthen the electronic transactions and limit the use of cash in the economy. One of the measures proposed is a special tax on cash withdrawals.

Bankers reportedly stress that cash money can easily and largely be channeled in the black economy. Therefore, a tax on cash withdrawals will drastically reduce cash transactions and by extension the black economy.

The bankers suggest that also credit and debit cards as wells as new technologies enabling contact-less transactions even for small amounts  and mobile phones can be used for the purchase of a transport ticket or a newspaper at the kiosk.

The bankers propose to the government, among others:

-Mandatory use of cards or other electronic payment networks for every transaction with professions where there is strong evidence of tax evasion or where cash is mainly used [ like bakeries, kiosks, street vendors and chestnut sellers?].

-Mandatory use of cards or electronic networks for transactions above a certain amount [this measure is already in effect].

Reforming the tax system by introducing a revenue-expenditure system. Households or professionals will only be taxed on the amount of income that is has not been spent. In this way, households and professionals will have a strong incentive to seek receipts for any expenditure in order to increase their expenditure and reduce the tax amount they will have to pay.

-Obligation for all businesses and regardless of their size to pay electronically every salary and wage. (source: Kathimerini via Liberal.gr)

I cannot say who came with this revolutionary idea, some genius young academics or the
Greek bankers themselves, those over 6o who have their secretaries or their kids doing their transactions for them using their own iphones and ipads.

I have no idea whether they have asked the country’s creditors to reform the tax system in a cash-less more-incentives Greek world, where households will be obliged to use revenue-expenditure books.

I absolutely do not understand how can one sleek and glossy group of bankers propose such measures and rule the economic system of a country where some 30% of population lives or is at risk of  poverty, the welfare system has collapsed and thousands of families live on the 20- or 50-euro banknote a relative or a friend secretly stick in their pockets so that they buy some food, medicine or pay a small bill.

Not to mention those over 60 with minimum knowledge of electronic devices and applications and those over 80 who cannot even use a mobile phone.

Tax cash withdraws will of course give “capital controls” a new dimension.

I suppose the whole proposal has been drafted by a group of some academic professionals stuck in a huge bubble- Prove me wrong!

PS Are we going now about to ban cash and become India?

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19 comments

  1. It was one of the more stupid ideas of Varoufakis to move to a cash-free economy. It is a very bad idea, since it disempowers the individual and empowers the banks and the State. When we have physical currency, we know that we control it. When it is a number recorded on a server owned by a bank, that number can change without warning and accountability. TERRIBLE IDEA.
    ~
    Of course, India has taken this idea of removing cash from an economy to a new level of craziness — making cash transactions almost impossibly by removing all but the lowest value notes, overnight… This, in a country where only 10% of the population has plastic cards.
    ~
    Is there a way to oppose this? I doubt it. Politicians and bankers remain locked in their cosy conspiracies and have no interest in democratic accountability. I suppose angry mob demonstrations across Europe might have some effect — but people will not do it. They are too lazy and complacent, and will wait until all their rights have been removed before acting.

  2. ach Varoufakis. cashless society is the ultimate wet dream of neoliberalism

  3. Yep, and ideal for a fascist state, too. It is a serious error of judgement to try to solve an immediate problem and create a different and equally big problem for the future.

  4. Giaourti Giaourtaki

    A “black economy” does not really need any bank, so do a broke society but a broke society can prosper without any money and without any bank. Better the banks seek asylum in Donald Kraut’s squat, customers are the many Greeks squatting parts of Florida and Chicago, who all voted egoistically for Trump hoping for he kicks Greece out of the Euro and then they will come with their dollars and save Greece for a holiday-long hallucination.

  5. There is a global war on cash going on, all under the banner of ‘fight against terrorism, fight against organized crime, etc.’. All for your own good. In India they started by banner high value notes, just like in Greece they banned the 500 Euro note. Now in India they are calling for banning physical money at all and make everybody “enter the digital world”. In Sweden they also want to ban money. But remember boys and girls, if money goes digital then they can restrict access to it or deduct taxes or whatever from it at any time. It is the perfect population control methodology.

  6. of course, it is. BTW banning 500euro not is eurozone, not just Greece

  7. I stand corrected. Next up is the 200 note and then gradually they will making payments with cash next to impossible. What to do? Convert to gold or silver, bitcoins perhaps. Societies can revert to barter to stop this control mechanism.

  8. You are both so right. Also this will never work in a tourist economy. Explain to the visiting Englishman why he has to use his credit card at a kiosk (at great expense, since it is a foreign card and he will be charged 2.75% per transaction–this is the standard fee for English banks, per purchase abroad, at the moment) and he will never come back. Is it time for us to all move to Bulgari as our businesses have done? Only 10% tax!

  9. good point

  10. I have to say that the 500 Euro note was great for Drug Dealers. Our highest denomination note is £50. I see no need for high denominations to be honest. £100 would be the tops in my view.
    However, given the way the EU is drifting I would not be in favour of anything that increases the control of sc*m like Juncker & Co.

  11. I believe you are right, Diana. This constitutes a new tax (2-5%) on anyone buying literally anything…except it is a tax for the banks. Likewise, banks do not let people just start submitting credit card deposits. First, the vendors need to set up a merchant account with a bank, which can cost thousands alone-all to the banks. Then, the banks take their percentage. It’s nothing more than a profit stream for the banks…again on the backs of the least stable businesses in Greece.

  12. Giaourti Giaourtaki

    Thanks to the Hermans this will not happen, if Hermans can’t taste and touch money they gonna demand their Kraut-Mark back, also corruption is so much more fun if they can smell the shit – but first they will buy some nuclear weapons because of the unreliable white house weirdo aka the pig in the tower.

  13. Yes, the cost of the portable machine for credit cards should be very low, but most banks (Greek ones in particular) are charging a fortune for either renting or buying these, even for long-established business customers of their. It’s just another scam by the banks to extort money from the population. And it’s a scam supported by politicians, the IMF, the OECD, etc etc. They all belong in gaol — instead of which they are busy racking up their large pension entitlements, as a reward for stealing money from the general population.

  14. This banning of high value notes comes from an economist’s report — I think to the IMF — showing that illegal cash transactions use large notes (well I never, who would have thought?!) .. so the solution is to remove all large notes so all crime will stop. LOL.

    And the proposal is to remove the 200 and 500 euro notes. Even if we concede that a lot of dodgy deals are done with cash — all that this will do is force people to use large bundles of 50s. I do not consider this to be a serious policy proposal: the only logic is to remove all cash, which is clearly the intent of the neofascist politicians who have been elected across Europe. In that sense, people deserve what they get for their stupidity: this does not apply in Greece, where XA have not benefited electorally from very severe and sustained economic crisis alongside recent mass immigration and refugee inflows.

  15. Where is the Greek revolution
    Rise up and destroy the vile eu
    Vive la revolution

  16. We are entering a very dark phase in this battle to retain our liberty. A proposal now being whispered behind the curtain in Europe is to impose a tax on withdrawing your own money from an ATM. The banks support this measure as a whole because they see this as preventing bank runs.
    Nobody will look at the direction we are headed. I am deeply concerned that these type of proposals will send the West in a real revolution not much different from that of Russia in 1917. The divide between left and right is getting much deeper and the left is hell bent on stripping those who produce of their liberty and assets. This type of confrontation is in line with our War Cycle, which we will update in 2017.
    This is the most dangerous period we are heading into for governments will respond only in their own self-interest to survive. The socialists hate those who produce. That is just the bottom line. Nobody should have wealth more than they and this is the same human emotion that has cost tens of millions of lives in civil conflicts through out the centuries. Proof this is a persistyent problem is the fact taht even the Ten Commandments state clearly that socialism is wrong: “You shall not covet your neighbor’s house … or anything that belongs to your neighbor” (Exodus 20:17). Nevertheless, this is repuidiated by socialists who say it’s not fair that anyone has something more than they do. This material jealousy has been the source of so much death throughout the centuries because it has been exploited by the ruling class to justify their theivery.
    We will review all our models and update this after the U.S. inauguration since the socialists are trying to figure out how to steal the election from Trump. There is no way to overturn Michigan, Wisconsin, and Pennsylvania without fraud and they need all three overturned to claim victory. This will not end nicely. The divide will only get bigger. The future is anything but stable and safe.
    The war on cash is in full swing. The whispers behind the curtain are starting to get louder. The headlines in Australia demonstrate how the press is already conspiring against the people. The new slogan rising is Cash is for Criminals. ABC of Australia ran the story:

  17. Where are the Athenians, the Spartans, the Myceans.
    Greeks unite, rise and overthrow these eu autocrats
    Vive la revolution

  18. You blame this right wing crap from banks and politicians on the Left? Your mind is warped, buddy.

  19. Giaourti Giaourtaki

    Liberty? Free America, go home to Europe and take your USA with you, it’s Indian Land, not yours and don’t forget to take also your illegal middle eastern god and bring her home.