Italy will water down previously announced plans to facilitate cash payments for goods and services, after after facing stiff opposition from European Union authorities and its own central bank.
The government had recommended a change to the current system, under which merchants may be fined for refusing card payments, proposing that no fines would be applied for transactions under €60 ($63.50).
Economy Minister Giancarlo Giorgetti told parliament that the government had reversed course. The move proposal had sparked condemnation from the European Commission, which claimed it was inconsistent with earlier EU recommendations to Italy to improve tax compliance.
“We intend to eliminate the measure on points of sales,” he stated in testimony regarding the budget, adding that some form of compensatory measures may be implemented to assist merchants in paying the commission fees on card transactions.
“We intend to eliminate the measure on points of sales,” he said in testimony on the budget, adding that some sort of compensatory measures may be introduced to help shopkeepers pay the commission fees on card transactions,” said Giorgetti.
“I hope there will be further reflection at the European level.”
After Rome’s decision, shares of Italy’s Nexi, Europe’s largest payment processing company, jumped as much as 5%.
In a country where an estimated 100 billion euros in taxes and social contributions are avoided annually, the Bank of Italy cautioned the government this month that lowering regulatory restrictions on the use of cash would feed Italy’s black market.
Rome received a 21-billion-euro tranche of the EU’s post-COVID Recovery Fund money in the first half of this year on the condition that the present penalty for merchants, which total 30 euros plus 4 percent of the transaction’s value, remain in place.
Despite recent events, October-elected Prime Minister Giorgia Meloni continues to be more lenient than her predecessors on the use of cash.