December 22, 2020
By Elisa Anzolin
MILAN (Reuters) – More than 5.3 million Italians have signed up for a government scheme offering a 10% refund for card payments in stores in just two weeks, an attempt by Rome to curb tax evasion and help retailers hit by coronavirus restrictions.
The roaring start to the scheme, which requires downloading an app followed by a drawn-out registration process, comes in stark contrast to Italians’ lukewarm response to the simpler Immuni app launched in June to trace COVID-19 infections.
The so-called “cashback” plan will officially kick off next month but the pilot programme from Dec. 8 to the end of this year, which allows savings of up to 150 euros, has already attracted 10% of the adult population.
“Over 5 million subscriptions is no small feat,” Leonzio Rizzo, a professor of public finance at the University of Ferrara, told Reuters.
Prime Minister Giuseppe Conte’s government believes that weaning Italians off cash can reduce rampant tax evasion, estimated by the Treasury at almost 109 billion euros per year.
Digital payments, unlike notes and coins, leave a trace and are therefore harder to hide from the taxman.
However the programme has its critics, including the European Central Bank, which said last week that governments should take a neutral approach to means of payments and complained it had not been consulted.
Retail association Confesercenti says that since 70% of card users already spend more than the 3,000-euros-per year threshold set for the refund programme, there is little incentive for them to increase their transactions.
“When fully operational, the scheme could generate a shift of just 4% of spending from cash to electronic means of payment in 2021,” Confesercenti said in a study last week.
The government has set aside 4.75 billion euros ($5.8 billion) to fund the programme in 2021-2022, but has not provided a figure for extra tax revenues it hopes to generate.
Another objection is that tax evasion is most rife among service providers such as plumbers, builders and doctors and these can still provide far bigger discounts in return for cash payments that can be offered by the card-incentive scheme.
Still, hard-pressed Italians are just happy to grab any opportunity to save money.
“I have signed up. Why not? I will keep doing what I was doing before and get some extra cash,” said Sara Sartori, 22, while paying with her credit card at a supermarket in Milan.
Rome is doubling down on the programme from Jan. 1 with an “invoice lottery” and a 1,500 euro prize for the 100,000 people who make the largest number of card purchases in a six-month period.
(Editing by Gavin Jones and Nick Macfie)
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