People will still be able to use cash at Icelandic businesses for the foreseeable future. On Friday afternoon the Minister of Finance announced that the ministry would not go forward with plans to eliminate most cash from circulation by removing the two largest bank notes from circulation and banning stores from accepting cash payments. The Draconian plans were touted as a way to combat tax evasion.
Draconian ideas met with fierce opposition
Last week the Minister of Finance unveiled ideas for what he described as a war on tax-fraud. The ideas included various steps to combat tax-evasion by corporations and wealthy individuals who use off-shore tax shelters to hide huge sums from the authorities, but in his introduction of the plans the minister focused specifically upon steps to crack down on the black economy by virtually eliminating cash.
Read more: Government floats ideas for draconian measures to combat tax evasion: Ban cash
The ideas were met with fierce resistance from critics who argued they did nothing to address the real problem, affecting only a fraction of suspected tax fraud. Personal privacy advocates also argued banning cash was an invasion of people's privacy.
Very little cash in circulation in Iceland
Others pointed out that Iceland is already among the countries with least cash in circulation. The local news site Vísir reports that cash only makes up 2.25% of GDP, compared to 9% in the EU, 7% in the US and 4% in the UK.
Faced with the torrent of criticism the Minister of Finance withdrew his plans on Friday, less than a day after he unveiled them.
People will still be able to use cash at Icelandic businesses for the foreseeable future. On Friday afternoon the Minister of Finance announced that the ministry would not go forward with plans to eliminate most cash from circulation by removing the two largest bank notes from circulation and banning stores from accepting cash payments. The Draconian plans were touted as a way to combat tax evasion.
Draconian ideas met with fierce opposition
Last week the Minister of Finance unveiled ideas for what he described as a war on tax-fraud. The ideas included various steps to combat tax-evasion by corporations and wealthy individuals who use off-shore tax shelters to hide huge sums from the authorities, but in his introduction of the plans the minister focused specifically upon steps to crack down on the black economy by virtually eliminating cash.
Read more: Government floats ideas for draconian measures to combat tax evasion: Ban cash
The ideas were met with fierce resistance from critics who argued they did nothing to address the real problem, affecting only a fraction of suspected tax fraud. Personal privacy advocates also argued banning cash was an invasion of people's privacy.
Very little cash in circulation in Iceland
Others pointed out that Iceland is already among the countries with least cash in circulation. The local news site Vísir reports that cash only makes up 2.25% of GDP, compared to 9% in the EU, 7% in the US and 4% in the UK.
Faced with the torrent of criticism the Minister of Finance withdrew his plans on Friday, less than a day after he unveiled them.
