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Taskforce Recommends Banning High Value Cash Transactions To Combat Australia’s Black Economy

Post by Sharat on October 28, 2017 · Under News · Comments Off on Taskforce Recommends Banning High Value Cash Transactions To Combat Australia’s Black Economy 

The interim report by the Black Economy Taskforce which has been established to fight back against black economy activities such as tax avoidance has suggested that consumers who pay in cash but fail to obtain receipts be levied with penalties. The report makes a number of recommendations and argues that in the past, the law has focused on companies instead of customers, however when a customer agrees to pay in cash in order to avoid tax, they become part of the problem.

Consumer focused sanctions

The Black Economy Taskforce says it intends to look at the merits of imposing consumer-focused sanctions, including the loss of legal rights and protections people face when they make cash payments without receiving a valid receipt in return. The taskforce did note that this kind of move would be part of a strategy to promote wider cultural change. This would include cracking down on companies and individuals who avoid tax and engage in cash-in-hand jobs.

Economy wide cash payment limit

The report also suggested that further consultation is warranted on the idea of an economy wide cash payment limit which would ban cash payment transactions that exceed $10,000. Many countries have already imposed limits on cash payments. For example, in 2015 France banned cash transactions that exceeded €1,000. Whilst admitting that most people and companies use cash for legal purposes, the fact that it is an anonymous form of payment is exploited by people who engage in the black economy or illegal activity such as money laundering, terrorism and illicit trade.

The use of cash declining

A decision to restrict the use of cash in the economy is likely to accelerate its decline as a method of payment. According to the most recent Consumer Payments Survey conducted by the Australian central bank, in recent years the use of cash for use as a method of payment has declined from 70 per cent to just 37 per cent last year. Australians overwhelmingly prefer to use plastic instead of cash and according to the survey, 52 per cent of all transactions are now conducted using a debit or credit card.

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