The European crisis... is this true? Spain supposedly outlaws transactions over 2500 Euros

[Zalatix]

http://en.europeonline-magazine.eu/spain-to-ban-cash-payments-of-more-than-2500-euros_203578.html

Spain to ban cash payments of more than 2,500 euros

Madrid (dpa) - Spain will prohibit commercial cash payments of more than 2,500 euros (3,275 dollars) in an attempt to fight tax evasion, Prime Minister Mariano Rajoy said Wednesday.

The ban will concern financial operations involving at least one entrepreneur. Those who violate the rule will face fines amounting to 25 per cent of the value of the payment.

The measure will form part of an anti-fraud plan due to be approved by the government on Friday.

The government has also announced a controversial fiscal amnesty allowing individual or corporate taxpayers to avoid penalties by paying an 8 to 10 per cent levy on undeclared income or assets.

Far-left leader Cayo Lara on Wednesday accused the government of encouraging tax evasion. Rajoy told parliament the "exceptional" measure will only be in force this year. The government expects it to bring 2.5 billion euros into state coffers.

Rajoy‘s government is scrambling to cut the budget deficit from 8.5 per cent of gross domestic product in 2011 to 5.3 per cent this year, while pressure mounts from Spain‘s European partners and financial markets.

The government has announced a budget involving spending cuts and tax hikes worth 27 billion euros, as well as cuts in health and education worth 10 billion euros.

[Sarah Ibarruri]

1. If it works, it's a good idea! nt

[Zalatix]

2. According to the rumor mills I'm hearing

it's not going to work at all. It's more like an economic death rattle.

[Sarah Ibarruri]

3. Sheesh. Wonder how this compares to the Great Depression? nt

[nadinbrzezinski]

4. I am wondering if these are actually for import\export

as in currency controls. They are commonly used, and hurt people in major ways.

It also leads to a black market...

But what you are seeing is a form of a currency control.

[muriel_volestrangler]

5. *Cash* payments

It's an attempt to stop tax evasion by people who don't declare their income, by taking and making payments in cash.

Spain announced plans on Friday to crack down on tax dodgers as it tries to scrape together extra funds to meet stringent budget targets this year.

Several independent economists estimate Spain's underground sector may account for up to one fifth of the economy, and many Spaniards have been working cash-in-hand to tide themselves over as unemployment is tipped to reach 24 percent this year.

The draft bill proposes to forbid cash payment for more than 2,500 euros ($3,300) and demand taxpayers declare overseas assets. Failure to comply with the new measures will result in fines, the government said.

http://uk.reuters.com/article/2012/04/13/uk-spain-fraud-idUKBRE83C18E20120413