News

2013.09.24 10:45

Lithuanian traders unhappy with cash payment restrictions

DELFI.lt2013.09.24 10:45

Lithuanian traders do not understand the logic behind the Government’s proposal to limit payments in cash to LTL 10,000 (EUR 2,900), The Baltic Course informs with reference to the news agency ELTA. 

Lithuanian traders do not understand the logic behind the Government’s proposal to limit payments in cash to LTL 10,000 (EUR 2,900), The Baltic Course informs with reference to the news agency ELTA.

According to the traders, there are no rational arguments in support of this move aimed to tackle shadow economy.

The Association of Lithuanian Trade Enterprises (LPIA) says that if such decision is adopted, honest customers will suffer instead of shadow economy – especially Belarusians and Russians who spend large amounts of cash in Lithuania.

Executive Manager of LPIA, Laurynas Vilimas, said that currently the traders see the proposal as worsening business conditions.

He said that the Ministry of Finance has not provided any research and analysis, which would support the idea, its necessity, benefit and effectiveness while dealing with the shadow economy. He added that currently no arguments in favour of the idea are noticeable – only additional limitations on the buyers and the traders.

According to Vilimas, the restrictions would cause additional inconvenience to customers which might have negative effects on sales and the state’s budget.

“Although in retail most payments are below LTL 10,000, this amount is exceeded in certain sectors, for example, furniture, home appliances or high-end clothing. Particularly when we talk about Belarusians and Russians – the main buyers of such products who pay in cash. It is likely that after the decision money spent by the citizens of the aforementioned countries will decrease,” stated Vilimas.

The association assessed that the law amendments would be most beneficial to the banks as they are interested in boosting online banking transactions.

“In this case the banks’ interests are more important,” Vilimas argued.

As reported, the Ministry of Finance has drafted law amendment projects which would limit payments in cash to LTL 10,000 (EUR 2,900), with administrative liability for breaching the law.

Minister of Finance Rimantas Šadžius said that in order to reduce the shadow economy, one form of its existence should be legally restricted.

Similar practice is employed in Latvia, France, Spain, Denmark, Slovakia, Italy and other EU states. The average amount of allowed payments in cash is similar to the one proposed in Lithuania.

Once the restrictions are in place, preconditions for the shadow economy are said to be reduced, the transactions would become more transparent and their control more effective. According to Finance Ministry, possibilities to avoid or reduce tax duties would also be minimised, while conditions for fair competition would become more favourable and transactions more secure.

The Ministry of Finance noted that the drafted projects are not final. Remarks and proposals by concerned institutions will be analysed in detail, while those argumentatively substantiated will be considered.