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.