Cash transactions exceeding €10,000 for high-value purchases such as properties, vehicles, art, precious stones and yachts will be banned in a bid to fight tax evasion.
Malta is one of the few countries where use of cash is still very high, a practice symptomatic of abuse, particularly tax evasion, the Finance Minister noted.
Though there is no legislation at EU level restricting payments in cash, 16 member states do have such limits, ranging from €500 in Greece to €15,000 in Poland.
The European Commission published a report last year concluding that cash restrictions would not significantly address terrorism financing but could be useful in the fight against money laundering.
The report also concluded that the impact on tax fraud would be limited, unless the threshold is very low.
Moreover, the Commission had pointed out that having different cash transaction limits across various Member States could distort internal competition, which in turn could result in relocations of businesses to other countries.
Restrictions on cash payments were a sensitive issue for European citizens, many of whom view the possibility to pay in cash as a fundamental freedom, which should not be disproportionally restricted, the Commission had said.
Financial Organised Crimes Agency
The minister also announced the setting up of a Financial Organised Crimes Agency to complement the Economic Crimes Unit of the police. Experts from the UK and the United States are helping in the process,
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