Greece Bans Cash*
Greece is banning the use of cash the soft way. As of 1.1. 2017, taxpayers will be granted tax-allowance and tax deduction only when they have made payments via credit or debit cards. The new guidelines refer to employees, pensioners, farmers but also unemployed.
Accepted expenditure will be:
- Purchases for food and supermarket products, electronic and electric devices, household equipment, footwear, clothing, fuel, furniture, cigarettes*, drinks
- Restaurants, cafeterias, bars and hotels
- Services like by hairdressers and beauty parlours, gyms and dance schools, car repair, plumbers, electricians, painters, carpenters, lawyers and accountants.
For doctors and pharmacy the same practice will be valid as in last year. The tax office will accept the expenditure only if payments are made per credit card or bank transfer.
Expenditure for utility bills, landlines and mobile phones, heating, rent, loan repayments that in fact swallow the largest amount of monthly expenditure for private households will not be accepted. Also not accepted is expenditure for toll and transport tickets.
In its “wisdom” the Greek Finance Ministry has determined the amount the taxpayers will have to pay per e-money in order to be able to get the tax allowance:
- 10% for annual income up to €10,000
15% for annual income €10,001-€30,000
20% for annual income over €30,001
The famous Greek wisdom in times of austerity, bailout agreements and economic crisis remains the same also in 2017 and as neoliberal as possible since 2010: crack the low and medium incomes, let the rich fly free
Find the Surrealism
- income €7,000: expenditure per plastic money must be €700
- income €10,000: expenditure per plastic money must be €1,000
- income €30,000: expenditure per plastic money must be €4,500
- income €60,000 expenditure per plastic money must be €12,000
Should a taxpayer will not be able to spend the necessary percentage of the annual income according to the guidelines, the punishment will be a penalty of 22% imposed on the missing difference.
I heard on television that couples will have to spend separately – but better check with your accountant. The average taxpayer in Greece needs an accountant anyway, someone who will follow the revenue-expedience balance month by month for the sake of the tax office.
In the bizarre Greek world we live in, households will be obliged to spend money even if they do not want to. As the large part of monthly need coverage (utilities etc) is not accepted by the tax office, households who do not manage to reach the necessary percentage through supermarket percentages will have to go and spend like crazy in retail, dance schools and gyms and other goods and service providers.
Exempted from the compulsory usage of credit/debit cards are seniors over 70 years old, residents of remote areas and people with disability over 80%. I suppose they will have to continue the collection of paper receipts.
KTG understands that with these new system, taxpayers will not need to collect the stupid receipts from cash register, where the amount had faded away when they were supposed to be brought to the tax office in a huge plastic bag.
The cap for cash transactions falls from 1,500 until 31.12.2016 down to 500 euro. In simple words: any purchase of good and service over 500 euro will need to be done via plastic money.
*I am not sure about cigarettes expenditure as kiosks do not have POS machines.
PS I don’t know what will happen if the tax office finds out that the taxpayer spent more money than determined in the guidelines. My fantasy is galloping with lots of crazy scenarios…