Paying in cash often means paying on the black in Italy. Therefore, there is a maximum limit of 2000 euros. And although this has not brought much, the new government wants to relax the norm further.
Oh great, the toilet flush is broken, the water flows and flows. The plumber has to come. Which can cost a lot of nerves – on the one hand because you almost had to ask him on your knees to come as soon as possible, on the other hand because you are once again faced with the decision: “I insist on the bill now and risk having to look for a new one next time, or do I pay in cash, i.e. on the black?” To be on the safe side, I withdraw 200 euros. But it has also happened that a plumber said to me right away on the phone: “I’m a pensioner, I’m only working a little on the side and I don’t issue any bills.” In the end, the best way to solve the dilemma is by feeling and by the amount.
The whole thing is even more nasty with specialists when they make home rounds on elderly, bedridden patients. My father, who was already very old, once told me about it: the doctor asked for 200 euros in cash for the visit and didn’t even make the gesture of wanting to issue an invoice for the fee. That had made me so angry that I was there next time. Lo and behold, the doctor conscientiously issued the fee invoice. In the meantime, such cases have become rarer because everyone can automatically deduct the medical expenses from the tax return via the tax number.
The Italian state has always fought against high levels of tax evasion. According to estimates, this is around 30 billion euros. Every government promises to put an end to this abuse. So does the right-centre government that has just come into office. The first announcements sound more like a relaxation of the control measures.
One of the instruments introduced in Italy in recent years to close the tax loopholes is the setting of an amount limit for cash payments. At the moment it is 2000 euros. All higher amounts must be paid via bank transfer and are therefore traceable. But just a few days after the swearing-in, Matteo Salvini, Deputy Prime Minister and chairman of the national-populist League, demanded that it be increased to 10,000 euros.
The opposition protested, pointing out that this would also give organized crime license to launder money. Salvini replied that in Germany, Austria and Sweden there is no such upper limit and as far as the mafia is concerned – there are much higher amounts anyway.
Harvard economist and former head of the International Monetary Fund, Kenneth Rogoff, also expressed doubts about this project. In an interview with the daily newspaper “La Repubblica”, he pointed out that the higher cash limit could very well encourage illegal payments. And as far as the comparison with Austria, Germany and Sweden is concerned: “There is no upper limit there because there is a certain tax discipline in these countries.” Salvini’s coalition partners also seem to see a danger in this, which is why they finally agreed on an upper limit of 5,000 euros.
Novella is around 30 years old and has a fruit and veg shop that I like to shop at. She carries nothing but products that are “ugly but good”. I ask her what she thinks of Salvini’s demand: “Nothing. Also because I prefer paying by card or app, for example. I don’t have to go to the bank every day to deposit the money.” And more and more people would no longer pay in cash, even if it was just a few euros.
But something else is interesting, says Novella: “We are obliged to issue the receipt. And it still happens that customers who pay in cash say: ‘I don’t need it and you save on taxes.’ I always get taken aback and still give them the receipt.”
Another example: A friend, a freelance graphic designer, earns neither good nor bad. Which means – she has to watch her expenses. Nevertheless, she affords a cleaning lady once a week for her two-room apartment because she hates cleaning. “How do you pay her?” I ask. “In cash, so black,” she replies and adds: “I can give her 10 euros an hour, I can’t do more. I told her I can register her and pay the social security contributions. The net would then be less, of course. She said that for the 120 euros she gets from me a month, it doesn’t make any sense.”
In order to make cashless payments attractive to Italians and at the same time to fight black money payments, an initiative in favor of customers was launched from December 8, 2020 to June 31, 2021. Anyone who paid for 50 purchases with a card during this period received cashback of a maximum of 150 euros. The government under Prime Minister Mario Draghi abolished the action, which cost the state almost 900 million euros. The money was to be used more effectively, and the premiums benefited the affluent north more than the south of the country.
Cash remains the most common form of payment, but more and more Italians are discovering the benefits of other tools, according to a study by Milan’s Polimi University of Applied Sciences. In the first six months of this year, the value of payments with these has grown by twenty-two percent compared to the same part of 2021. From June 1, 2022, all shops and service providers will also be obliged to accept card payments, even if it is just one euro. Anyone who refuses faces a fine of thirty euros plus four percent of the value of the bill.
But habits are hard to break – cash is still the most proven payment method. And so it often happens that when you pay for the espresso in cash in the café, the cashier hesitates a little, and only when the customer insists is a receipt printed out. Of course, it’s only about 1.10 euros – but as you know, the Italians are heavy coffee drinkers.
