Italy’s ruling coalition may deploy a tax on banks in its fight against digital payments.
The coalition’s proposed tax on banks — which has been dubbed a “solidarity tax” — would reduce the fees merchants are charged for accepting digital payments, Reuters reported Wednesday (Dec. 7).
“An option being discussed is using resources stemming from a solidarity contribution weighing on banks to lower those fees,” Tommaso Foti, a lawmaker from Prime Minister Giorgia Meloni’s Brothers of Italy party, said after a budget meeting, according to the report.
Beyond that, the government is looking for ways to eliminate banks’ fees on digital payments of less than 15 or 20 euros, Maurizio Lupi, the leader of another party in the coalition, said, per the report.
This news comes three days after Meloni proposed changes in her draft budget for 2023 that would allow merchants to decline digital payments on transactions under 60 euros and increase the limit for legal cash transactions from 1,000 euros to 5,000 euros.
Meloni has criticized Italy’s long-time efforts to move the country toward digital payments, saying that they are a “hidden tax” on families and small businesses and that cash limits are an attempt by the government to overstep the bounds of its power, the Financial Times reported Sunday (Dec. 4).
The report noted that Italy is one of Europe’s lowest digital payment adopters, citing figures from the Bank of Italy that show that the average number of card transactions made per year by Italian consumers is 85, compared to European Union (EU) consumers’ 155.9.
A day after Meloni’s announcement, Italy’s central bank warned the new government about the risks of a cash-heavy economy.
Fabrizio Balassone, head of the structural economic analysis directorate of the Banca d’Italia, gave testimony in front of the Italian Parliament on Monday (Dec. 5), in which he warned that such moves could create opportunities for the black economy and tax evasion.