The State would collect some 700 million euros extra in taxes in the region of Murcia if cash payments were restricted to a maximum of 1,000 euros, according to the experts in the Tax Office.
The notion of capping payments in cash has been proposed by the new government of the Partido Popular and aims to tackle the “submerged economy” in Spain. Although the cash limit has not been announced experts agree on the 1,000 euros cash limit already introduced in Italy.
The measure, proposed some months ago by the Tax Office as a means of tackling tax evasion and avoiding money laundering by replacing large cash payments with cheques, could result in a tripling of the amount of tax currently being collected.
The Government has announced that the measure will form part of the Plan to Control Tax for 2012.
In the region of Murcia VAT fraud is estimated at a level of 24.3% above the national average. If the experts’ calculations are correct the measure could result in a 19.2% reduction in the “irregular economy.”
