A measure designed to combat tax fraud, which elEconomista covered yesterday and Prime Minister Rajoy will announce today, could stymie tax evasion for both corporate workers and the self-employed by limiting cash payments to 2,500 euros.
This limit could be adjusted higher, closer to France's 3,000 euro level than Italy?s 1,000. Compared to Spain, there is half is much fraud in France and about the same amount in Italy.
Non-compliant taxpayers will be hit with a fine equal to 25% of the amount they would have owed in taxes. This decision could increase tax revenues, but it will be difficult to monitor the money that some companies pretend to spend in order to deduct their VAT and Sociedades taxes.
People will now think think hard when asked: "Do you need your receipt?"
