Cash is becoming a think of the past

Physical money has been with us for so many years  even when electronic money came to the force. Now there is a tendency to use bank cards,contactless payment and banks try to make this process more easier and faster for people. The government of Latvia also want to limit use of cash.

In January the Cabinet of Ministers discussed amendments to the Act on Taxes and Fees.

The project of The Act provides the following changes:

1. to prohibit the use of cash in real estate alienation transactions;
2. reduce the maximum use limit of cash from 7 200 to 3 000 euros;
3. to impose a cash restriction on the sale of motor vehicles of categories M1 (including M1G) and N1 (including N1G) - motor vehicle alienation transactions may be made in cash up to EUR 1500.

At the moment, according to the Act of Taxes and Duties, taxpayers, including natural persons who do not engage in economic activity, have a ban on cash transactions that are more than for EUR 7 200.

Why Latvia need it? The State Revenue Service often finds that taxpayers are looking for ways to reduce the true amount of the transaction so that they can make mutual settlements in cash. The organization “MoneyVal” made an assessment and found that the use of cash increase risks of money laundering and financing of terrorist.

The amendments probably will come into force this year - 1st May, 2019.

Maybe it is not so bad to use cash less because companies and accounters can concentrate attention to bank accounts, e-system, other more important tasks and not to count money from the cash register.

Reference:

https://ifinanses.lv